From 1 July 2026, Payday Super will significantly reshape how small and medium-sized (SME) businesses manage cashflow, with the shift expected to remove a longstanding liquidity buffer many SMEs have relied on.
Under the legislated reforms, employers will be required to pay superannuation contributions at the same time as wages, rather than at a different time, some making payments quarterly. The change is designed to ensure workers receive their super sooner and close the $5.2 billion annual gap in unpaid super across the economy.
The scale of the shift is significant. At 30 June 2025, there were almost one million employing businesses in Australia – 97 per cent classified as small businesses. The Australian Chamber of Commerce and Industry (ACCI) has warned that over 40 per cent of small businesses are not yet aware of the forthcoming changes to their superannuation requirements. Independent research from Employment Hero reinforces the concern, finding that 58 per cent of business owners had not yet heard of the reforms, despite them taking effect on 1 July 2026.
Nick McGrath, CEO of Moneytech, said the change represents more than just a payroll compliance adjustment.
“For many SMEs, the timing gap between payroll and quarterly super contributions has effectively acted as a short-term cashflow buffer,” McGrath said. “Moving to Payday Super compresses that cycle. It means super leaves the business at the same time as wages, rather than being paid at the end of the quarter.”
Chris White, CEO of Pay Australia, a specialist payroll and business services company that helps SMEs manage their payroll obligations, said the financial impact of the change will be felt immediately by businesses that are unprepared.
“Payday Super is more than a compliance adjustment, it removes the quarterly cash float many SMEs have quietly relied on,” White said. “Employers should expect faster, more frequent outflows and a one-off working-capital hit roughly equal to one quarter’s contributions. The smartest move is getting specialist advice early – talk to your payroll provider, accountant or finance broker to model the impact and line up funding if needed.”
White also highlighted the compounding challenge posed by the simultaneous closure of the ATO’s Small Business Superannuation Clearing House (SBSCH), which will be permanently decommissioned on 1 July 2026.
“The SBSCH closure adds a second layer of pressure on top of the cashflow change,” White said. “Around 250,000 small businesses have relied on this free government service to pay their employees’ super. From 1 July 2026, they will need to be fully set up on a commercial alternative and those systems need to be tested and running before the deadline, not on the day the old one goes dark.”
McGrath said the practical cashflow impact will depend on pay cycle frequency, but the numbers are significant regardless of how businesses pay their staff.
“A business running weekly payroll will go from making four super payments a year to up to 52 – that’s up to 48 additional payment events,” McGrath said. “For sectors such as construction, hospitality and transport, where labour costs dominate and cashflow is already tight, this isn’t just an administrative change. It’s a structural shift in how cash leaves the business.”
The financial vulnerability of SMEs makes the timing particularly acute. The Reserve Bank of Australia’s Small Business Finance Advisory Panel data shows cash reserves for small businesses have declined to around pre-pandemic levels – approximately three months of operating expenses for the median business, sitting at the very lower end of the recommended three-to-six-month buffer.
For businesses already stretched, absorbing both accelerated super outflows and a system migration simultaneously is a significant ask.
Moneytech is already seeing the impact, with McGrath reporting increased demand from SMEs seeking to shore up working capital ahead of the July deadline.
“The businesses that come through this well won’t be the ones that wait until June to act,” McGrath said. “They’ll be the ones that model the cashflow impact now, line up funding if they need it, and make sure their systems are ready. For brokers, accountants and advisers, this is one of the most important conversations they can be having with clients right now.”
Moneytech recommends SMEs begin modelling the cashflow impact of Payday Super now, ahead of the 1 July 2026 commencement. Businesses should review debtor processes, assess working capital requirements and engage their payroll provider, accountant or finance broker to ensure systems and funding are in place well before the deadline.
