Expert-led tax essentials delivering practical insights and strategic foresight. Learn more.
While Payday Super does not change which workers are subject to superannuation guarantee (SG), it does materially change when SG must be paid, increasing risk where contractor payments are irregular or made outside payroll systems.
In practice, many organisations do not have payroll oversight of all contractor payments, particularly where contractors are paid through accounts payable, on invoice, or under milestone‑based arrangements. Under a payday‑based SG system, this lack of visibility becomes a key compliance risk.
Payday Super applies to contractors who are employees for SG purposes, including those captured under the extended definition of employee. The introduction of Payday Super does not expand or narrow the existing SG contractor rules.
However, the move from a quarterly to a payday‑based SG framework means that errors in contractor classification or payment timing are more likely to be identified earlier, with increased financial consequences under the redesigned Superannuation Guarantee Charge (SGC) framework.
For contractors subject to SG, a Qualifying Earnings day (QE day) arises when the contractor is paid amounts that attract SG. This may differ from traditional employee payroll cycles, particularly where contractors are paid on invoice, on milestone or project completion, or on an ad‑hoc or irregular basis.
Each payment that constitutes qualifying earnings may trigger a new QE day, starting a 7‑business‑day timeframe for SG to be received by the superannuation fund.
A common issue raised by employers is that payroll teams often do not have full visibility over contractor payments, particularly where contractors are paid through accounts payable rather than payroll, different business units engage contractors independently, or SG is calculated or reviewed after payment has been processed.
Under Payday Super, this separation between payroll and accounts payable increases the risk of late SG payments where obligations are identified too late.
Contractors are frequently paid under arrangements that do not align neatly with payroll cycles, including milestone payments, retainers and completion payments. These payments may still give rise to qualifying earnings and corresponding SG obligations.
Where payments are large or infrequent, SG liabilities can be significant and difficult to correct if identified after the relevant payday.
This example is illustrative only.
An organisation engages a contractor who is an employee for SG purposes. The contractor is paid via accounts payable rather than payroll. An invoice for $10,000 is approved and paid on 8 August 2026, and the payment includes amounts that constitute qualifying earnings.
Under Payday Super, 8 August 2026 is the contractor’s QE day. The employer must ensure SG is received by the superannuation fund within 7 business days of that date. If payroll is not aware of the payment until later, the window to make a compliant SG contribution may already be narrowing, increasing exposure to the superannuation guarantee charge.
As outlined in earlier Payday Super alerts, the redesigned superannuation guarantee charge includes a scalable administrative uplift. Contractor‑related SG errors are often detected later than payroll errors, increasing potential exposure where payments are not identified promptly.
Employers should review whether their systems and processes adequately capture SG obligations for contractors, including visibility over contractor payments made outside payroll, identification of contractors subject to SG, alignment between payroll and accounts payable processes, and accurate identification of qualifying earnings and QE days.
Grant Thornton can assist with reviewing contractor arrangements and SG processes, including assessing contractor classification for SG purposes, reviewing payment flows between payroll and accounts payable, identifying gaps in SG governance and oversight, and supporting readiness assessments ahead of 1 July 2026. Meet our employment tax team here.
Payday Super regulations explained: how the new administrative uplift works and what employers must do next
Payday Super PCG 2026/1: key changes, compliance approach, employer readiness
The Treasury Laws Amendment (Payday Superannuation) Bill 2025 has now been introduced into the House of Representatives, with very little change to the original draft released for consultation
