Superannuation Changes from 1 July 2026

Payday Super: What’s Changing

• From 1 July 2026, employers must pay superannuation guarantee contributions at the same time as salary and wages, rather than paying superannuation quarterly.
• Superannuation guarantee contributions must be received by the employee’s superfund within 7 business days of payday, to avoid being liable for the punitive superannuation guarantee charge.
• Superannuation guarantee will no longer be based on Ordinary Time Earnings (OTE) but will instead be based on Qualifying Earnings (QE), which includes additional amounts such as all commissions paid to an employee, salary sacrificed amounts, and payments to certain contractors.

Implications for your business

• Cash flow management will become more important, as super payments will need to be processed with each pay cycle – whether that is weekly, fortnightly or monthly.
• You will need to ensure your payroll system is capable of handling real time superannuation guarantee payments alongside wages. Accounting software programs like Xero, MYOB and QuickBooks have this functionality, although it can take a few days for the payment to be processed and received by the employee’s fund.
• If you are currently using the ATO Small Business Superannuation Clearing House, you’ll need to upgrade your payroll software to be able to something capable of handling superannuation payments directly, as the ATO are closing down the SBSCH from 30 June 2026.

The Payday superannuation rules are now law, so employers need to ensure they are ready to comply prior to 30 June 2026.

Division 296 Tax: New Rules for High-Balance Super Accounts

The proposed Division 296 tax still targets individuals with super balances over $3 million, however there have been some substantial changes to the original proposal:

• The government has removed the proposed tax on unrealised gains, but will be applying an additional 15% tax to earnings attributable to balances over $3M (potentially taking the effective tax rate to 30%).
• A second threshold of $10 million has been introduced, with a further 10% tax to earnings attributable to balances over $10M (potentially taking the effective tax rate to 40%).
• To determine whether Division 296 will apply to an individual, their total superannuation balance will be calculated at both the start and end of the year, with the higher figure being used in the calculation. Although for year ending 30 June 2027 (being the first year the tax will apply) Division 296 tax will be based on balances at 30 June 2027, not 30 June 2026.
• Both thresholds will be indexed to CPI.
• This legislation is has been drafted but not yet passed. We will provide updates as this progresses.
• The tax cost base of assets owned by a self-managed superannuation fund can be reset as at 30 June 2026 for Division 296 tax purposes, meaning this tax will only be applied to capital gains earned after 1 July 2026.