Payroll Software Costs, Pricing Models and 2026 Rules
Payday Super and payroll software: what your system must do since 1 July 2026
What Payday Super means for payroll software in 2026–27, from qualifying earnings and the 12% rate to paying with every pay run, the 7-business-day rule and the clearing house closure.
Since 1 July 2026, employers must pay super guarantee contributions with each payment of wages, not quarterly. Under the Treasury Laws Amendment (Payday Superannuation) Act 2025 (assented to on 6 November 2025), a contribution generally has to be received by the employee's fund within 7 business days after pay day, the super guarantee rate is 12% of qualifying earnings, and late or short payments attract a redesigned super guarantee charge. For payroll software this means three things: it must calculate super on qualifying earnings each pay, report that liability through Single Touch Payroll, and send the payment every pay run in a way that reaches funds in time. The ATO's free Small Business Superannuation Clearing House closed on 1 July 2026, so employers who used it need another payment channel, usually their payroll software or a commercial clearing house.
This guide is part of the payroll and HR software comparison overview. It explains the rules from a software-selection point of view; the ATO's Payday Super pages are the authority on detail.
What changed on 1 July 2026
| Before 1 July 2026 | Since 1 July 2026 | |
|---|---|---|
| When super is due | Quarterly, 28 days after the quarter ends | With each pay day (each "qualifying earnings day") |
| When the fund must receive it | By the quarterly due date | Generally within 7 business days after pay day |
| First contribution to a new fund | Same quarterly rule | A longer period of 20 business days for a new employee's first contribution, or after a change of fund |
| Earnings base | Ordinary time earnings | Qualifying earnings (ordinary time earnings plus items such as salary-sacrificed amounts) |
| Rate | 12% (since 1 July 2025) | 12% |
| Free ATO clearing house | Available to eligible small businesses | Closed from 1 July 2026 |
| STP | Reported super, but not QE | Must report qualifying earnings and super liability |
The super guarantee charge for late or short payments has been rebuilt around each pay day. It includes the shortfall, notional earnings and an administrative uplift, and some components can be reduced if you correct the problem yourself. The details are technical; the ATO publishes how the charge is calculated and what to do if a payment is late.
What payroll software must do
- Calculate qualifying earnings per pay. The software must know which pay items count. Ordinary hours and many allowances do; most overtime does not count as ordinary time earnings, but salary-sacrificed amounts are added back. Check the defaults against your pay items.
- Apply 12%, or your higher contracted or award rate. Some enterprise agreements and contracts pay more than the minimum.
- Report the liability through STP with each pay event.
- Create the payment at the same time as the pay run: either by sending contributions through a super clearing service built into the software, or by producing a SuperStream file for a clearing house or fund.
- Track receipt: funds must receive the money within the deadline, so the software should show when each contribution was sent and, ideally, when funds accepted it, and flag rejections (for example a wrong member number).
- Handle new employees: request stapled fund details from the ATO when an employee does not choose a fund, and recognise the longer first-contribution period.
Timing: the 7-business-day window is shorter than it looks
Money has to move from your bank, through a clearing house or the software's payment service, to each fund, and the fund must allocate it. Each step can take a business day or more.
Illustrative timeline for a Thursday pay day:
| Day | Step |
|---|---|
| Thursday (day 0) | Pay run finalised, wages paid, STP report lodged, super file created |
| Friday (business day 1) | Employer's bank debit or payment to clearing service |
| Monday (business day 2) | Clearing service receives funds and distributes to funds |
| Tuesday–Wednesday (business days 3–4) | Funds receive and allocate contributions |
| Following Monday (business day 7) | Last day the fund can receive the contribution |
A public holiday or a rejected payment uses up the buffer quickly. A good set-up pays super on the same day as wages, automatically, with rejections flagged the next day.
Illustrative cost of the change
Payday Super changes cash flow and payment volume, not the amount of super.
Illustrative example. A business pays 20 employees fortnightly with total ordinary pay of $64,000 a fortnight. Super at 12% is $7,680 a fortnight, or $199,680 over 26 pays. Under the old quarterly system the business held each quarter's super for, on average, about two months; now it pays within days. The total is unchanged, but working capital falls by roughly two months of super, about $33,000 at this payroll size ($199,680 × 2 ÷ 12).
On the software side, some payroll products include super payments in the subscription; others charge per transaction or per employee for a clearing service. Illustrative: at $0.50 per contribution, 20 employees × 26 pays × $0.50 = $260 a year, compared with 20 × 4 × $0.50 = $40 under quarterly payments. Ask how your vendor charges.
Questions to ask your payroll provider
| Question | Why it matters |
|---|---|
| Is Payday Super fully supported, including QE and super liability in STP? | Required since 1 July 2026 |
| How does super get to funds, and how long does it usually take? | You need to meet the 7-business-day rule |
| Are there per-transaction fees for super? | Volume has risen with every pay run |
| How are rejected contributions reported? | You must correct and resend in time |
| How are off-cycle pays (termination, back pay) handled? | Each payment of wages can trigger a liability |
| Does it request stapled fund details? | Required for new employees who do not choose a fund |
| What reports show super paid versus liability per employee? | Needed for reconciliation and audits |
If you previously used the ATO's clearing house, you needed a replacement by 1 July 2026; contributions for the April–June 2026 quarter were still due by 28 July 2026 under the old rules, through another payment method.
Related: Payday Super relies on correct STP reporting, explained in STP Phase 2, and super details must appear on each payslip, see payslip and record rules.
Frequently asked questions
Does Payday Super apply to contractors?
It applies to anyone who is an employee for super guarantee purposes, which can include some contractors paid mainly for their labour. The ATO's employee/contractor decision tool helps.
What if my pay frequency is monthly?
The rule follows each pay day, so a monthly payer pays super monthly, within 7 business days of each pay day.
Does the software vendor become liable if super is late?
No. The employer is liable for the super guarantee charge. A contract may give you remedies against a vendor, but the ATO liability stays with you.
Is the ATO taking a lenient approach in the first year?
The ATO has published its compliance approach for the transition; check its Payday Super pages rather than assuming any concession applies to you.
Sources
- Australian Taxation Office — Payday Super, qualifying earnings, super guarantee charge and the clearing house closure
- Federal Register of Legislation — Treasury Laws Amendment (Payday Superannuation) Act 2025 and the Superannuation Guarantee (Administration) Act 1992
- business.gov.au — employer super obligations
- Fair Work Ombudsman — superannuation details required on payslips
