One of the most common payroll mistakes Australian employers make isn’t underpaying wages; it’s mishandling superannuation. Super errors often go unnoticed for months or years, until an ATO review, employee complaint, or payroll audit uncovers unpaid amounts, interest, and penalties that quickly add up.
With super now moving to a payday-based system, getting it wrong is becoming more expensive and harder to fix. This guide explains what employers need to do, why mistakes happen, and how to stay compliant without adding complexity to your payroll process.
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Superannuation is governed by the Superannuation Guarantee (SG) rules, which apply to almost every employer in Australia. These obligations are non-negotiable and are closely monitored by the ATO.
As an employer, you must pay super for eligible employees, including:
A common mistake is assuming casual or short-term staff are exempt. In reality, most payroll-related super errors occur because eligibility rules are not reviewed regularly or payroll settings have not been updated.
Use the Super Guarantee eligibility tool from the ATO to confirm whether an employee is eligible.
From 1 July 2025, the Super Guarantee rate is 12% of an employee’s ordinary time earnings (OTE). This is the final scheduled increase under current legislation.
Key points employers often miss:
Incorrect earnings categorisation is one of the biggest causes of underpaid super, especially in award-heavy sectors like NDIS, healthcare, and community services.
For guidance on which payments count as ordinary time earnings (OTE) or salary and wages for super, follow this link to the ATO Website:
List of payments that are ordinary time earnings | Australian Taxation Office
Employers must give eligible employees the opportunity to choose their super fund during onboarding. If no fund is nominated, contributions must be paid into a MySuper-authorised default fund.
Common compliance issues include:
These mistakes often happen when onboarding is rushed or handled outside the payroll system.
To know in detail about setting up super for your business, click the link below:
Setting up super for your business | Australian Taxation Office
ATO compliance relies heavily on records. Employers must keep clear and accessible records that show:
Missing, incomplete, or unclear records can turn even a small super error into a compliance breach, even where contributions were paid on time.
Until 30 June 2026, employers may still pay superannuation quarterly. From 1 July 2026, Australia moves to payday super, requiring contributions to be paid in line with each pay cycle.
Until June 2026, quarterly deadlines are:
From July 2026 onwards:
Many employers underestimate the disruptive impact this change can have without system automation.
Late super payments trigger the Super Guarantee Charge (SGC), which is far more punitive than many employers realise. The rules differ slightly depending on whether contributions are paid quarterly (until June 30, 2026) or on a per-payday basis (from July 1, 2026).
The SGC includes:
Under the payday super, the SGC is calculated and assessed per qualifying earnings (QE) day, which is effectively each payday. The charge consists of:
Even genuine mistakes can result in thousands of dollars in additional costs, particularly for businesses with large, casual-heavy, or award-covered workforces. With Payday Super, timeliness is critical; late or missed payments are immediately non-compliant, and the SGC is assessed per pay run rather than per quarter.
Super must be paid through an electronic super clearing house to meet SuperStream requirements. This is not optional.
Clearing houses allow employers to:
Common options include:
The ATO’s Small Business Superannuation Clearing House has been closed to new users and will be fully retired by 30 June 2026, meaning employers still using it must transition to an alternative solution.
To avoid processing delays and ensure a seamless transition, employers should begin migrating to a modern payroll or commercial clearing house solution well before the SBSCH's final retirement date.
Manual fund-by-fund payments increase the risk of errors, delays, and missing records.
Super compliance failures rarely happen because employers don’t care. They happen because manual processes break under pressure.
Modern payroll software addresses the most common risk points by:
With payday super becoming mandatory, payroll systems are no longer just helpful; they are essential infrastructure.
Across payroll audits and compliance reviews, the same issues appear repeatedly:
Understanding these patterns helps employers prevent issues before they escalate.
Use this quick self-review to assess your current setup:
If you hesitate on any of these, there is likely a compliance gap worth addressing now.
Superannuation is no longer a background payroll task. With increased enforcement, greater employee awareness, and the shift to payday super, it has become a frontline compliance issue for Australian employers. The businesses that manage super well are not doing anything complex; they are simply using the right systems, reviewing their processes regularly, and removing manual risk.
Getting super right protects your business, supports your employees, and keeps payroll running smoothly as regulations continue to evolve.
Super for employers | Australian Taxation Office
About Payday Super | Australian Taxation Office