PCG 2026/1: Payday Super - first year ATO compliance approach
Document type: Final PCG
Status: Current
Date of issue: 28 January 2026
Date of effect: 1 July 2026

1. This Guideline has been prepared following the enactment of the Treasury Laws Amendment (Payday Superannuation) Act 2025. This Act amended the Superannuation Guarantee (Administration) Act 1992 (SGAA) and other laws to give effect to the policy announcement known as Payday Super. 2. This Guideline sets out our compliance approach for the first year of operation of Payday Super in respect of investigating a superannuation guarantee (SG) shortfall for a QE day (as defined in section 17A of the SGAA) that occurs from 1 July 2026 to 30 June 2027 inclusive. 3. This Guideline does not replace, alter or affect our interpretation of the law in any way. Nor does it have any impact on obligations to pay superannuation contributions under other laws or industrial instruments and agreements, including where the obligations refer to the amount of superannuation that is to be paid for the purposes of the SGAA. 4. All references in this Guideline to Payday Super, and all legislative references in this Guideline, are to the SGAA as amended by the Treasury Laws Amendment (Payday Superannuation) Act 2025, with effect from 1 July 2026. 5. All references to an 'employee' in this Guideline refer to an 'employee' under section 12. It covers both individuals who fall within the ordinary meaning of employee and individuals who come under the extended definition of an employee in subsections 12(2) to 12(11).

Scope: 12. This Guideline applies to all employers in respect of a QE day that occurs from 1 July 2026 to 30 June 2027 inclusive.

6. The Payday Super reforms align the payment of SG contributions with the payment of relevant earnings (which is usually on a weekly, fortnightly, or monthly basis), instead of the current quarterly system, in order for an employer to avoid liability to the SG charge. 7. There is concern that employers will not have had sufficient time to deploy, test and embed changes within their payroll systems and business processes prior to the Payday Super law commencing on 1 July 2026. This increases the risk that employers will be unable to fully meet the requirements to reliably have contributions processed and accepted by super funds in the Payday Super timeframes. 8. Broadly speaking, the changes under Payday Super tax employers that pay employees qualifying earnings [1] but do not make sufficient, timely eligible contributions for their employees' benefit (or do not provide a choice of fund when making such contributions). The tax, SG charge, is imposed if the employer has an SG shortfall, which will arise if the employer has one or more 'individual base SG shortfalls' [2] or 'choice loadings' [3] greater than nil for a day on which qualifying earnings are paid. [4] 9. An employer will not have an SG shortfall [5] , and therefore will avoid the SG charge, for a QE day [6] by ensuring they have an individual base SG shortfall of nil for all their employees. [7] This occurs where sufficient 'on-time contributions' are received by the employees' super funds to offset the individual SG amount [8] for each employee for the QE day. 'On-time contributions' are eligible contributions that are made within one of the following 'allowable periods' [9] : 10. If SG charge is payable because an individual base SG shortfall amount is greater than nil, the employer can still partially reduce the amount of the charge by making eligible 'late contributions' up until the day the Commissioner make an assessment of the SG charge for the QE day. If sufficient contributions are made for each employee to fully offset the individual base SG shortfalls, the employer's individual final SG shortfalls will be nil. [10] However, the amount of the SG charge cannot be reduced to nil by late contributions because the SG shortfall (which the SG charge equals) includes notional earnings and an administrative uplift amount. [11] 11. The Commissioner does not have a discretion concerning when the Payday Super reforms apply to employers. While we will apply our compliance resources as outlined in this Guideline, if we obtain definitive information that an employer has an SG shortfall in respect of a QE day, we are required to apply the law to that employer. [12] This is the case even if they fall within the low-risk zone outlined at Table 2 of this Guideline for the relevant QE days. Who this Guideline applies to 12. This Guideline applies to all employers in respect of a QE day that occurs from 1 July 2026 to 30 June 2027 inclusive.

Intro: 14. Employers need to ensure that they are paying the minimum amount of SG contributions for their employees in order to avoid liability to the SG charge under the SGAA. This includes aligning their payment frequency with Payday Super requirements. 15. The compliance approach outlined in this Guideline is in recognition of the scope of the multifaceted changes required of employers, supporting systems and service providers in readiness for the 1 July 2026 start date. 16. We will prioritise the application of compliance resources to areas of highest risk, to investigate employers who have not paid the minimum amount of SG contributions for their employees. That is, employers who have an individual final SG shortfall greater than nil for one or more of their employees for the QE day after 28 days following the end of the quarter in which the qualifying earnings were paid. 17. There may be cases where an employer attempts to pay the minimum amount of superannuation contributions for all their employees so that those contributions are received within the allowable periods in line with Payday Super, but issues occur that cause the contributions to be late in reaching the employees' super funds. This could occur, for example, due to contributions being rejected by a super fund. The level of risk for these cases will depend upon whether the error is corrected, and how quickly the employer corrects the error. An employer who corrects the error as soon as is reasonably practicable will fall into a lower risk zone than an employer who does not. This means that the rectification should happen as soon as the employer becomes aware of the issue and is able to correct it. 18. There may also be cases where an employer continues to pay the minimum amount of SG contributions for all of their employees by the quarterly due dates that applied prior to 1 July 2026 but makes no attempt to pay more regularly. These employers cannot be considered to fall into the low-risk zone and compliance resources may be applied to investigate such an employer. 19. We will prioritise compliance resources in respect of employers in the high-risk zone outlined in Table 1 of this Guideline ahead of those in the medium-risk zone. We will not have cause to apply compliance resources in respect of employers in the low-risk zone. This applies to all components of the SG charge, including notional earnings, administrative uplift and choice loading. 20. Table 2 of this Guideline outlines the requirements that must be satisfied for an employer to fall into each of the risk zones. An employer will be in the high-risk zone if they have one or more individual final SG shortfalls greater than nil for their employees after 28 days following the end of the quarter in which the qualifying earnings were paid. | When an employer's risk zone changes during the year: 21. Employers may move between risk zones during the year. For QE days for which an employer is in the low-risk zone, we will not have cause to apply compliance resources to review those periods. However, if the employer moves into the medium-risk or high-risk zone in respect of other QE days, we may allocate compliance resources to review those QE days for which the employer is in the medium-risk or high-risk zones. 22. The fact that an employer is in the low-risk zone for a number of QE days in the first year is not of itself a factor that would move the employer into the medium-risk or high-risk zones. 23. This Guideline only applies for QE days occurring from 1 July 2026 to 30 June 2027. While an employer may be low risk during that period, if the employer continues to make contributions for their employees after the required timing from 1 July 2027, and therefore has individual base SG shortfalls for one or more employees for QE days on or after that date, they may be subject to compliance action in relation to those QE days. 24. This Guideline does not cover and has no impact on how the Commissioner may allocate compliance resources, and gives no indication of risk, for QE days on or after 1 July 2027.

Example s: 25. The following examples illustrate how this Guideline can apply in various factual scenarios. The examples are indicative only and do not cater for every fact pattern. The intention of these examples is to illustrate how we will prioritise the allocation of compliance resources to investigate whether an employer has an SG shortfall for one or more QE days occurring from 1 July 2026 to 30 June 2027. | Example 1:  low risk  evidence the employer attempts to reduce their individual base SG shortfall to nil by making sufficient on-time eligible contributions  rejected contributions 26. From 1 July 2026, an employer pays superannuation contributions at the same time they pay their employees. Usually, the super funds receive these contributions on time. However, on occasion, the super fund rejects a contribution. When this happens, the employer works with the fund and the employee to fix the error and re-makes the contribution as soon as possible. 27. Even though the re-made contributions are received late, the employer is considered to fall into the low-risk zone because they corrected the error as soon as reasonably practicable, resulting in all their individual final SG shortfalls being nil. The Commissioner will not have cause to apply compliance resources to this employer for any QE days occurring from 1 July 2026 to 30 June 2027. | Example 2:  low risk  evidence the employer attempts to reduce their individual base SG shortfall to nil by making sufficient on-time contributions  successor fund transfers 28. From 1 July 2026, an employer pays superannuation contributions at the same time they pay their employees. However, between July and September 2026, some employees' superannuation accounts are moved to a new fund under a successor fund transfer, and the employer does not yet have the new account details. As a result, the employer's contributions to the old fund are rejected and the employer cannot make the contributions on time for those employees. Once the employer gets the new account information, they immediately make the contributions, which are received late. 29. The employer is considered to fall in the low-risk zone because they tried to comply with Payday Super and made the late contributions as soon as it was reasonably practicable, resulting in all their individual final SG shortfalls being nil. The Commissioner will not have cause to apply compliance resources to investigate this employer for any QE days occurring from 1 July 2026 to 30 June 2027. | Example 3:  medium risk  employer moves to comply with Payday Super and contributions are made in full, some are made late 30. For 6 months from 1 July 2026, an employer, who pays employees monthly, continues paying superannuation contributions quarterly, ensuring the employees' super funds receive the contributions by the end of the 28th day after the end of each quarter. From 1 January 2027 to 30 June 2027, the employer starts to make superannuation contributions monthly but, due to reporting errors, some contributions are late in reaching the funds. These errors continue until August 2027. 31. For the QE days in the period 1 July 2026 to 31 December 2026, the employer pays sufficient eligible contributions for the QE days to ensure that they have no individual final SG shortfalls greater than nil by the end of the 28th day after the end of each quarter. However, as they have not adjusted their contribution payment frequency in line with Payday Super in that period, they are considered to fall into the medium-risk zone for QE days in that period. We may investigate this employer in respect of those QE days, but the allocation of compliance resources to this employer in respect of those QE days will be given lower priority than employers that fall within the high-risk zone. 32. For QE days in the period 1 January 2027 to 30 June 2027, if the employer remedies the errors as soon as reasonably practicable, resulting in no individual final SG shortfalls for those QE days at that time, they will be considered to fall into the low-risk zone for those periods. The Commissioner will not have cause to apply compliance resources to the employer in respect of those QE days. 33. This Guideline does not apply to the QE days from 1 July 2027 and we may investigate the employer for those QE days. | Example 4:  medium risk  employer makes sufficient contributions, no change to frequency of contributions in line with Payday Super 34. Before 1 July 2026, an employer pays their employees weekly and pays all superannuation contributions for their employees quarterly, ensuring the employees' super funds receive the contributions by the end of the 28th day after the end of each quarter. From 1 July 2026, the employer makes no adjustments. Although they pay sufficient superannuation contributions, they continue to pay those contributions quarterly, so they are received by the employees' super funds by the end of the 28th day after the end of each quarter. 35. The employer is considered to fall into the medium-risk zone because they did not change the frequency of their contributions to comply with Payday Super. We may investigate this employer for the QE days occurring from 1 July 2026 to 30 June 2027, but the allocation of compliance resources to this employer will be given lower priority than employers that fall within the high-risk zone. | Example 5:  high risk  employer makes insufficient contributions by the end of the quarter  rejected contributions 36. Before 1 July 2026, an employer pays their employees fortnightly and pays all superannuation contributions for their employees so they are received by the employees' super funds by the end of the 28th day after the end of each quarter. From 1 July 2026, the employer makes no adjustments and continues to pay superannuation contributions quarterly, even though they pay their employees fortnightly. Some contributions are rejected by the fund due to data errors, and the employer does not fix these errors by the end of the 28th day after the end of the quarter. 37. The employer is considered to fall into the high-risk zone because they still had individual final SG shortfalls greater than nil after 28 days following the end of the relevant quarter in which the qualifying earnings were paid. The Commissioner will prioritise compliance resources to investigate this employer ahead of employers in the medium-risk zone for the QE days occurring from 1 July 2026 to 30 June 2027. | Example 6:  high risk  employer incorrectly calculates qualifying earnings and makes insufficient contributions by the end of the quarter 38. Before 1 July 2026, an employer pays their employees monthly and pays all superannuation contributions for their employees so that they are received by the employees' super funds by the end of the 28th day after the end of each quarter. From 1 July 2026, the employer makes no adjustments and continues to pay superannuation contributions quarterly, even though they pay their employees monthly. The employer also misclassifies some payments and incorrectly treats them as not being qualifying earnings. As a result of this misclassification, the employer does not make sufficient contributions for some employees. 39. The employer is considered to fall into the high-risk zone because they have individual final SG shortfalls greater than nil after 28 days following the end of the relevant quarter in which the qualifying earnings were paid. The Commissioner will prioritise compliance resources to investigate this employer ahead of employers in the medium-risk zone for the QE days occurring from 1 July 2026 to 30 June 2027. | Example 7:  high risk  employer has individual final SG shortfalls for their employees 40. Before 1 July 2026, an employer pays their employees monthly and pays all superannuation contributions for their employees so that they are received by the employees' super funds by the end of the 28th day after the end of each quarter. From 1 July 2026, the employer pays superannuation contributions at the same time they pay their employees. 41. From 1 January 2027, the employer experiences cash flow difficulties and ceases making superannuation contributions for their employees. The employer does not make any superannuation contributions for their employees for QE days occurring between 1 January 2027 and 30 June 2027. 42. The employer fails to make sufficient contributions for the QE days between 1 January 2027 and 30 June 2027, leading to individual final SG shortfalls greater than nil after 28 days following the end of the relevant quarters. This places the employer in the high-risk zone. The Commissioner will prioritise compliance resources to investigate this employer ahead of employers in the medium-risk zone for those QE days. | Example 8:  movement from low-risk zone to high-risk zone 43. From 1 July 2026, an employer pays super at the same time they pay their employees and has a track record of consistent, timely payments that are received by the employees' super funds within 7 business days. They are considered to fall in the low-risk zone at that time. 44. However, from 1 January 2027, the employer's processes begin to slip  superannuation contributions are now routinely made well after the allowable period to make on-time contributions, follow-up with super funds and intermediaries about contribution errors becomes irregular, and the employer does not fix these errors. This results in those contributions being received after 28 days following the end of the relevant quarter. 45. This change in behaviour results in the employer moving from the low-risk zone to the high-risk zone for QE days between 1 January 2027 and 30 June 2027. The Commissioner will prioritise compliance resources to investigate this employer ahead of employers in the medium-risk zone for those QE days. | Example 9:  movement from medium-risk zone to low-risk zone 46. From 1 July 2026, an employer consistently calculates superannuation contributions incorrectly for its employees, resulting in the employer not making sufficient contributions for its employees for each QE day. Following complaints, the employer makes further contributions, ensuring that the individual final SG shortfalls for all employees are nil by the end of the 28th day after the end of the quarter in which the employees were paid. The employer is in the medium-risk zone for QE days from 1 July 2026. 47. After consulting a tax adviser, from 1 October 2026 the employer implements regular reconciliation checks, corrects the underpaid amounts, and introduces controls to ensure contributions are calculated accurately going forward. On occasion during this transition period, some contributions have errors and are ultimately received by the funds after 7 business days, but these are rectified as soon as is practicable. 48. This shift in behaviour results in the employer moving from the medium-risk zone to the low-risk zone for QE days between 1 October 2026 to 30 June 2027. The Commissioner will not have cause to apply compliance resources to the employer in respect of QE days occurring from 1 October 2026 to 30 June 2027.



What this Guideline is about | Example 2  low risk  evidence the employer attempts to reduce their individual base SG shortfalls to nil by making sufficient on-time contributions  successor fund transfers | This Practical Compliance Guideline sets out a practical administration approach to assist taxpayers in complying with relevant tax laws. Provided you follow this Guideline in good faith, the Commissioner will administer the law in accordance with this approach. | Date of effect: 13. This Guideline applies in respect of the application of the Commissioner's compliance resources to investigating an SG shortfall for QE days occurring from 1 July 2026 to 30 June 2027 inclusive only (the first year). It will not apply to a QE day that occurs on or after 1 July 2027. | Unpaid superannuation query and proactive case selection | We will not have cause to review the employer's actions. | Compliance resources may be applied to investigate whether the employer has an SG shortfall for one or more QE days. Medium-risk arrangements will be given lower priority than arrangements that are rated high risk. | Compliance resources will be applied to investigate whether the employer has an SG shortfall for one or more QE days. High-risk arrangements will be given the highest priority resourcing. | An employer will be in the medium-risk zone where the employer does not meet the criteria to be in the low-risk zone, but the individual final SG shortfalls for all their employees are nil by the end of 28 days after the end of the quarter in which the qualifying earnings were paid. | Commissioner of Taxation 28 January 2026 | Previously released in draft form as PCG 2025/D5 | Legislative References: SGAA 1992 10A SGAA 1992 12 SGAA 1992 12(2) SGAA 1992 12(3) SGAA 1992 12(4) SGAA 1992 12(5) SGAA 1992 12(6) SGAA 1992 12(7) SGAA 1992 12(8) SGAA 1992 12(9) SGAA 1992 12(9A) SGAA 1992 12(10) SGAA 1992 12(11) SGAA 1992 16A SGAA 1992 16B SGAA 1992 16B(2) SGAA 1992 17A SGAA 1992 17A(1) SGAA 1992 18C(1) SGAA 1992 18C(1)(c) SGAA 1992 18C(2) SGAA 1992 18D SGAA 1992 20A Treasury Laws Amendment (Payday Superannuation) Act 2025

Legislative references: Case References: Macquarie Bank Limited v Commissioner of Taxation [2013] FCAFC 119