The way employers pay superannuation contributions is set for a major change. The Government’s ‘payday super’ reforms requires employers to pay super at the same time as they pay salary and wages, instead of quarterly. The Treasury Laws Amendment (Payday Superannuation) Bill 2025 and Superannuation Guarantee Charge Amendment Bill 2025 has passed and it will take effect from the 1st of July 2026. For super funds, this change represents one of the most significant shifts to contribution processing in decades. And now is the time to prepare.

Why payday super is being introduced

Currently, employers only need to pay superannuation guarantee (SG) contributions quarterly. This delay means employees may not see their super until weeks or months after they’ve earned it, and some never receive it at all. By being paid super on their payday, it means “the average 25-year-old workers’ retirement balance an extra $6000 in today’s dollars”, according to the Government. The Government’s payday super reforms aim to:

• ensure employees receive their super sooner
• reduce unpaid super by aligning payments with payroll cycles
• improve visibility and trust in the super system
• help workers grow their retirement savings faster.

The practical impact of payday super

From 1 July 2026:

• Employers will be required to pay SG contributions each pay cycle, at the same time as, or soon after, salary and wages are paid.
• Contributions will need to be received by the employee’s super fund within 7 business days of payday.
• Funds must allocate or return contributions that cannot be allocated, within 3 business days, down from 20.
• A new “qualifying earnings” (QE) base will replace the current ordinary time earnings (OTE) base for SG purposes.
• The ATO’s Small Business Superannuation Clearing House will close to new users from 1 October 2025, and cease operation from 1 July 2026.
• There will be changes to the SuperStream data and payment standards:
  • Data standard will allow for faster payments via the New Payments Platform and improve error messaging to ensure employers and intermediaries can quickly address errors.
  • Enhanced error response messaging will allow employers, gateways and clearing houses to quickly identify and fix contribution issues.
  • A new SuperStream Member Verification Request (MVR) message is also being developed for employers to verify an employee’s super fund details are correct and the super fund will accept a contribution.

What Payday super means for super funds

Although employers are the ones directly affected by the payment timing rules, super funds will feel the operational impact. More frequent payments mean more data, more reconciliation and greater demand for automation. Here’s what funds should consider:

1. Managing increased contribution volumes

Funds that currently process monthly or quarterly contributions will soon much more frequent inflow of data. Systems that rely on batch processing or manual checks will need to evolve to handle continuous data flows. This shift aligns with a broader payments modernisation agenda – moving from batch-based systems like BECS to real-time, data-rich payments through the NPP. The move to payday super will therefore dovetail with the retirement of BECS by 2030, reinforcing the importance of modern, flexible payment infrastructure.

2. Automating data validation and reconciliation

With higher transaction frequency means there’s less room for manual intervention. Automated tools that can validate, reconcile and report in real time will become critical to efficiency and compliance. For funds, adopting technology that leverages richer NPP data will help reduce contribution errors, accelerate allocation and minimise unallocated contributions.

3. Updates to SuperStream messages

Funds will need to review and update their SuperStream messaging and processing systems to accommodate new data elements introduced for payday super, including fields related to NPP payment information and the addition of the new Member Verification Request (MVR) message type. Improved error response messages will play an important role in maintaining data integrity. These changes will help funds, employers, and intermediaries resolve contribution errors faster, improving member outcomes and reducing administrative effort.

Prepare for payday super now

Payday super will reshape the super landscape. The proposed start date of 1 July 2026 gives funds a window to:

• assess system scalability and readiness
• automate data ingestion and reconciliation
• test processes for continuous contribution flows
• collaborate with clearing houses, payroll providers and gateways to align on new data and payment standards
• review communication strategies for members and employers.

Funds that prepare early will be best positioned to manage the transition with minimal disruption.

How MessageXchange can help

MessageXchange already enables some of Australia’s largest super funds, payroll providers and employers to exchange super contribution data securely, accurately and efficiently. Our platform is built to handle high transaction volumes and real-time processing, making it ideal for the move to payday super. By automating data validation, securely transferring contributions and providing detailed reporting, MessageXchange helps funds and employers get ready for this next evolution in the super system.

The bottom line

Payday super is not yet law, but it’s coming. For super funds, now is the time to prepare systems, partners, and processes to handle more frequent contributions. The changes will deliver long-term benefits to members, but only if the industry acts early to adapt.

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We recently attended the ASFA conference in Sydney, where nearly 1,000 delegates gathered to hear from industry experts about the future of superannuation. Among the standout sessions were talks on quantum computing and AI. However, a particularly practical and pressing topic for the superannuation industry was the upcoming changes associated with PayDay Super.

Damian Hill from the Commonwealth Superannuation Corporation (CSC) led a panel discussion featuring Emma Rosenzweig, Deputy Commissioner for Superannuation and Employer Obligations at the ATO, Michelle Bower, CEO of the Gateway Network Governance Body (GNGB), and Sarah O’Brien, Head of Regulatory Policy at Rest.

A quick poll of the audience revealed that the biggest challenge in people’s mind when it comes to getting ready for PayDay super is ‘handling increased transactions’, with 31% of the vote. Next was ‘less time to return unallocated payments’ with 27% of the vote, then ‘increased support requested by employers’ with 19% of the vote, ‘still waiting for administration and policy parameter’ with 14% of the vote and finally ‘the 1 July 2-26’ start date with just 9% of the vote.

The discussion largely centred on the impact of PayDay Super for funds and employers, clarifying key requirements. Employers will need to ensure super contributions are sent to funds within seven calendar days, while funds have three business days to allocate these contributions to employees’ accounts. This creates additional pressure for funds to accurately match contributions.

Interestingly, audience questions were about:

• the New Payments Platform (NPP), which unlike BECS, allows real-time payments, and its use in Superannuation payments. The ATO have confirmed they will look at updating Superstream messaging standards to include NPP as a payment method. There are also working groups discussing enhancements to the fund validation service (FVS), to support NPP payment methods, such as including whether an account is NPP reachable and potentially adding PayIDs. The discussions are still ongoing, but we’ll provide updates as we get them.
• increases in transaction volumes and the impact on current commercial arrangements between funds and their administrators or gateways. The transaction volume is anticipated to increase 3-5 times under Payday Super. We already see peaks on Wednesday and Thursdays so we can expect to see an increase in volume on those days. But we do know many organisations are assessing their options for Superstream and payments, given the impending changes.
• what data or information can be provided to assist in supporting or motivating employers to provide accurate data to super funds in their contribution files, as this will vastly improve match rates. The ATO have confirmed there will be no changes to any of the services currently offered, so it will likely be up to the industry to decide how best to manage this change and ensure data is exchanged correctly the first time around.

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The shift to Payday Super will transform superannuation, bringing both new demands, as well as new and exciting opportunities for funds. Here’s what you need to know.

The current state of superannuation

200 million contributions annually: Today’s superannuation transaction network processes around 200 million contributions each year. Error rates: An error rate of 1.6% is seen across the 200 million transactions that go through the superannuation transaction network. However some payroll providers and clearing houses report much higher error rates of 11-12%. Current timeframes: Funds currently have 20 days to allocate contributions to member accounts.

The Payday Super shift

Significantly increased contributions: Under Payday Super, contribution volumes are expected to rise 3-5 times, to 600 million to 1 billion per year. More errors than ever: With the number of contributions set to rise significantly, error rates are likely to increase. This will require funds to manage errors more efficiently, through automation and streamlined processes. Shorter timeframes: Under Payday Super, it’s expected funds will have 3 days from when they receive funds, to allocate them to the member account.

The implications for super funds

Rising costs: With increased contribution volumes and tighter timelines, the costs of existing services may rise. Higher risk of errors: If the error rate stays the same, there is set to be a large rise in the number of errors, requiring additional resources to manage corrections. Demand for efficiency: Funds will need tools that reduce the admin burden, streamline workflows, and ensure compliance within reduced timeframes.

The opportunity: Automation and new payment methods

The evolution of super contributions brings new tools and opportunities for funds, including: New Payments Platform (NPP): Real-time payment processing and PayTo, which allows funds to be pulled from accounts instantly, enable faster, more secure transactions. Business automation: By automating tasks such as validations, error checks, and payment pulls, funds can reduce manual processes and improve efficiency across operations. Automation can be setup to only pull funds once validations have occurred, significantly reducing the admin burden of funds.

Maximise the value from your service provider

With the demands of Payday Super, funds need to get the most out of their service provider. MessageXchange is uniquely positioned to meet these needs: Future-ready solutions: We support current batch payment methods, such as Direct Entry (DE) within the BECS framework, set for decommissioning in 2030, along with real-time options through the New Payments Platform (NPP), including PayTo. Advanced business automation: Our automation tools are designed to handle complex processes, reduce errors, and minimise time spent on manual tasks. Proven experience: Trusted by some of Australia’s largest businesses, we simplify complex workflows and payments, allowing funds to focus on delivering value to their members.If you want to learn more about our superannuation services? Ask our experts by getting in touch below.

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