Payday Super – another burden for the SME business owner 

Picture of Steven Nicholson
Steven Nicholson

August 4, 2023

What is changing? 

Last week, Treasurer Jim Chalmers announced that the current pattern of quarterly superannuation guarantee payments will end on 1 July 2026 and be replaced by the requirement to pay employees’ superannuation every time they pay their regular wages. 

Why is it changing? 

Due to the compounding nature of superannuation, the government claims that increasing the frequency of contributions will make a small but noticeable improvement to an employee’s retirement savings. 

Also, by increasing the frequency of payments required from businesses, the ATO will have better visibility of those businesses that are falling behind with their obligations and will be able to take appropriate action before the balance of unpaid superannuation gets too big. 

Who is impacted most by this? 

Yet again, it is the SME business owner that must shoulder the administrative burden of this change. If you are using a third-party payroll provider or your accountant to make superannuation payments on your behalf, this is likely to lead to higher fees. You could also be slugged with higher fees by the provider of your superannuation gateway.  

Also, there is the cash flow impact to consider. What was once a quarterly liability has been brought forward to potentially a weekly liability so you will have to find the cash to be able to pay on time and you will have to adjust your cash flow forecasts accordingly. 

Many SME business owners handle their own payroll and then have their accountant review the entries and make any corrections to superannuation liabilities quarterly, in line with their BAS reporting. This will no longer be possible and could lead to overpayment of superannuation guarantee payments with no mechanism for recovery or correction, leading to you having to pay more than you should have to. 

What can I do about it? 

Fortunately, you don’t have to do anything about this now as it will be three years before the changes take place. 

Well before this date though, you should look for a provider of payroll* and bookkeeping services that is proactive with ensuring such changes to legislation are brought to your attention in a timely manner and will be implemented for your business without additional fees. With unlimited 24/7 support and fixed monthly fees, Retinue can support your business navigate these changes. 

Retinue’s payroll service includes the processing of hours and wages rates provided by you. We do not determine award rates for your employees or provide advice on the correct employment status of your employees. It is your responsibility to ensure that your employees are paid correctly and we recommend obtaining advice from specialised employment relations experts.

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