Payday Super Starts July 2026 So Build Cash Reserves Now

We're back this week with a hugely important topic.

Payday Super is one of the biggest changes to hit Australian employers in years — and many businesses aren’t ready for the cash flow impact.

In this episode, Lee and Mai unpack what Payday Super actually means, why it’s a major shift from the current system, and how it could seriously affect small business cash flow if you’re not prepared.

From 1 July 2026, employers will be required to pay superannuation at the same time as wages, rather than quarterly. While the super rate itself isn’t changing, the timing is — and that timing could catch businesses off guard.

In this episode, Mai talks about:

• What Payday Super is and how it changes the current super guarantee system
• Why paying super quarterly will no longer be an option
• The cash flow shock many businesses are about to face
• What happens if you don’t have the cash available on payday
• ATO penalties, interest, and why “paying late” is no longer forgiven
• How mismatched debtor days vs pay cycles can create serious pressure
• Practical steps you can take now to prepare
• Why building cash reserves before July 2026 is critical

This episode is a must-listen for any business owner who employs staff (or pays themselves wages). 

Download our helpful checklist here: https://myaccountingadvantage.com.au/documents/MAA-Pay-Day-Super-2026-Checklist.pdf

Learn more about My Accounting Advantage

Disclaimer

The advice contained in this presentation is general in nature only and should not be acted on without first seeking professional advice.

Your personal circumstances have not been taken into account, and you should consider the appropriateness of the advice to your individual needs.

Transcript

Welcome And Why Advice Matters

Speaker 1 0:04

Hello and welcome back to the podcast, My Accounting Advantage, featuring Mai Harris. My name's Lee Woodward, the co-host of the program. She joins me again. Mai, welcome back. Thanks, Lee. We've had such good feedback from the program. And actually, the concrete design person who was working on my house listened to your podcast. You know, it was such a great moment of a business owner. It was his first um 001 invoice. He's come from big building to having his own small business, and it's the whole reason that this podcast exists. And I want to thank you for providing the knowledge that you do to all industries.

Speaker 0:46

You're welcome. It's so important to me that, you know, businesses have good advice and also feel that they can be confident about the information that they're getting and also provide them with a base to make good decisions.

Speaker 1 1:01

Well, being a small business owner, it's like spinning plates. Now, the the three big swim lanes of any business is lead generation, lead conversion, and client fulfillment. And client fulfillment is where we are today. You know, having all the business owners get this advice, be it your own clients, and then the people that listen to the podcast who are now following it as uh it starts to pop up everywhere. Well, suddenly they've got a place where they can say, okay, I'm just gonna listen to Mai's podcast, and I might chip away at doing that because you've got to be, you've still got to eat and and be doing the work while progressing and improving. And for anyone who's a small business owner, it can be quite a lonely place.

Speaker 1:46

For sure. Because they generally their own boss. So it's really difficult for them to know whether or not they're making the right decision and who to ask and who to go to as a sounding board, and whether or not that sounding board is a good sounding board. To come to someone who is a professional and also have seen a lot of um, you know, things that's going on in the world, in the business world, and also advising different types of people and businesses. So experience is everything.

What Payday Super Changes

Speaker 1 2:23

Couldn't agree more. And when we look at being a business owner, CEO stands for Chief Everything Officer.

Speaker 2:45

Well, let's get into today's topic because it's a very serious topic. And what we're discussing today is payday super and why this change will catch businesses off guard. Firstly, Mai what is payday super? Okay, so payday super that um has just come in. So it is a reform of a super guarantee system. So currently we have um super guarantee obligations. When you pay your employees, you pay yourself, there's a compulsory super of 12% that you must pay on top of your base wage. That payment is typically not due and payable until the quarter ends. So, for example, if um you pay wages within a March 2026 quarter, which is this quarter, the um your super obligation is not due until the 28th of April. That's going to change. So from 1st of July 2026, when Payday Super comes in, you are as a business owner and an employer will be uh obligated to pay super at the same time.

Deadlines Interest And Penalties

Speaker 1 4:14

What if you don't have it?

Speaker 4:16

That's the biggest question that a lot of businesses are asking at the moment. The ATO don't care. So, you must comply. If you don't comply, you'll be penalized. In this case, you'll be charged interest and penalty from the day it's due, which is from the payday. Because according to the legislation, the super payment needs to land in the employer employee, sorry, soup super account within seven days from the payday. That's pretty much. You need to make the contribution on the day that you make wages payment to be compliant. And is the percentage changing? No, it doesn't change. Super payment itself doesn't change. Nothing changed. It's the frequency of the payment. So the super guarantee is still remain at 12%, but you don't have that grace period to weather out, you know, your cash flow, whether or not you have it or you don't have it, um, until the quarter ends. You must have it when you actually make wages payment in order to comply with this law.

Speaker 1 5:36

So, Mai forgive me for asking this question. Currently, it's quarterly that we pay super, and now it's gonna be on the payday.

Speaker 5:46

Correct. That's why it's called payday super, and this can really hurt your cash flow. So a lot of businesses, well, most businesses who actually employ people or you paying yourself, you need to be aware of that. You need to be well prepared for this cash flow blow. That's what I call it.

Speaker 1 6:11

And when does this actually arrive?

Cash Flow Mismatch And Reserves

Speaker 6:14

It's effective from the 1st of July 2026. And that's why we need to talk about that now. Because you have roughly three months to be well prepared for this change. Because when it comes in, there's no forgiveness. So unfortunately, if you are late, you must lodge a super guarantee charge form with the ATO and submit and let them know that, oh, sorry, I am late with my super payment. And with that, there will make you pay interest and penalty on the amount that is outstanding. Even though you paid for it a little bit late, unfortunately, you still need to submit that form and then pay the fines and penalties. So the key here is to be well prepared and don't pay it late. But you don't have a lot of time once you make that wage payments to actually make the super payment because it's at the same time as when you make wages payment. So there's a few things that you need to be prepared for here. You need to review your pay cycle, whether or not it matches and or in line with your debtor days. And for example, if you receive income every month, your debtor days is 30 days, and you pay staff on a weekly basis. Okay, you're going to face a bit of a cash flow mismatch here. So you need to have sufficient reserves to pay for wages and super upfront. So that's the one thing that you you need to be well prepared for is your cash flow. And you should have cash reserves. So you should build up your cash reserve now.

Speaker 1 8:19

There's a lot of small business owners out there listening to this and thing. It's getting harder. And it is getting harder because what's left over is getting smaller. What else can they do in preparation for this payday super?

Speaker 8:33

There's a couple of things that you can do here. So you need to review your debtor days. So go through um, you know, your accounts receivables just to have a look at your average debtor days. You can do that through Xero if you use Xero, and um there's reporting there that you can use. Once you've done that, you need to review your pay cycle. Whether you're actually getting pay at this um same time or um your your pay cycle is monthly, for example, but you get pay every fortnight. Well, then you should be okay because the money money's coming in. However, if you actually um getting pay after 30 days or 45 days, and you are currently paying your employees every fortnight, well, there's gonna be a cash flow mismatch there. So you need to understand how much reserve you would need in order to accommodate for the super payments now, whilst you didn't need that, didn't need to be aware of that before. So you had a bit of a buffer back then when you had to pay super every quarter. But now it's as you pay wages, you must pay super. So that means your reserves must be there.

Three Month Checklist And Support

Speaker 1 10:03

Mai a very deep topic today, and if there's any employees out there listening to this, spare a moment for the person who employs you, provides that place for you to work, pay your bills, support your family. But there's an enormous amount of pressure on small business anyway, and payday super is just added to it. I don't want it to sound like a dark thing, but I know having 22 employees myself at one time at the peak of my small business, it was hard. You come in and I'm not coming in today, I'm working from home, and there's so much going on, and we all need a place to work or someone to work for, or we're gonna run our own thing. And for anyone listening, it's not easy. Being a small business owner is the reason this podcast even exists. Mai, final comments from you what would be the checklist to get right, to be ready for payday super.

Speaker 10:58

Okay, yeah, you are absolutely right. It's not easy for business owners. I vouch for that myself. And, you know, just to maintain the level of income that comes in to pay for wages and other operating costs, fixed costs, it's sometime it's a bit of a juggling act. So yes, be kind. Be kind to your um business owners. So the checklist here is that in the next um three months that you are preparing for payday super to come in is to make sure that you have the sustainable profit each month so that you end up with sufficient cash flow. So profit equal excess cash. So just review your projected revenue that will be coming in each month and um ensure that your profit margin is still there. If not, that's you know, that's just part of business. So it might be a good idea to reach out to your bank manager or um, you know, seek some sort of, you know, financial backup, overdrafts, or something that um will help you weather this change and getting you comfortable with paying super every time you pay wages. So the key here is to make sure you have sufficient cash or suffi not all and sufficient reserves back up. And if you're not quite sure where to go, seek advice early and make plans for this change so you don't get caught out.

Speaker 1 12:49

Mai Harris, another fantastic podcast. We look forward to having you back next week. Thank you for joining us.

Final Takeaways And Sign Off

Speaker 12:54

Thanks, Lee.