On 14 March, Treasury released an exposure draft of the ‘Treasury Laws Amendment Bill 2025: superannuation guarantee (“SG”) reforms to address unpaid super’. This reform is part of the ATO’s efforts to close the $5.2 billion SG gap identified in 2021–22, largely made up of overdue or unpaid superannuation contributions. The ATO believes the new legislation will enhance compliance and integrity. These reforms will strengthen Australia’s superannuation system and support a more dignified retirement for Australian workers by addressing the issue of unpaid superannuation. 

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Proposed reforms

The new laws are proposed to commence from 1 July 2026. The key proposed changes include:

  • The timeframe for superannuation funds to allocate or return contributions will be shortened from 20 business days to just three.
  • The ATO’s Small Business Superannuation Clearing House will be decommissioned from 1 July 2026. The ATO will work closely with small businesses in advance to assist them in transitioning to an alternative solution that supports the Payday Super system.

An employer will incur the new SG charge if their employees’ superannuation fund does not receive the SG contributions within 7 calendar days of payday. Limited exceptions apply:

  • Contributions for Ordinary Time Earnings (OTE) paid within the first two weeks of a new employee’s start date will have their due date deferred until after the initial two-week period.
  • Small and irregular payments made outside of an employee’s normal pay cycle will not trigger a payday. Instead, they will be treated as due on the next regular OTE payment or payday.

The SG charge will be tax-deductible. However, any penalties and interest applied after the ATO’s assessment of the SG charge will not be tax-deductible.

‘Qualifying earnings (QE)' will be a new term defined in subsection 10A(1) of the Superannuation Guarantee (Administration) Act 1992 as a person’s ordinary time earnings. The overall SG entitlements for employees are expected to remain unchanged. Further proposed changes include:

  • The quarterly maximum super contribution bases will be replaced with a single annual cap, aiming to more accurately align SG contributions with an individual's total earnings over the year, rather than with earnings tied to fixed quarters.
  • Superannuation guarantee charge (SGC) shortfalls will be calculated based on ‘QE days’ rather than on a quarterly basis.

To strengthen oversight, the ATO will match Single Touch Payroll (STP) data with superannuation fund reports, allowing for earlier identification of missed or delayed payments.

Preparing for Change

Accountants involved in payroll will need to ensure internal systems are modernised to comply with the new laws. While the announcements remain proposals and are subject to revision, it is essential to take a proactive approach in preparing for any potential implications.