Payday Super Exposure Draft

DSPANZ provided a submission to the Treasury's consultation on the draft legislation and regulations for Payday Super on 15 April 2025. 

Access the full submission
Access the full submission

In this submission, we demonstrated our support of the policy intent for Payday Super and how it will benefit employees' retirement outcomes.

However, we recognise that Payday Super will fundamentally transform the superannuation guarantee (SG) contribution process, with the required changes impacting every participant in the contribution supply chain - employers, payroll software providers, gateways, clearing houses, super software providers, super funds and the Australian Taxation Office (ATO). Payday Super impacts how more than 850,000 employers make SG contributions, and it requires more than 300 payroll products together with gateway/clearing house providers, APRA registry/administration providers, APRA super funds and self-managed super funds to facilitate changes to their systems.

DSPANZ members are experienced in delivering large-scale changes that impact employers, such as SuperStream and Single Touch Payroll (STP), and supporting them through the transition process. A key factor in successful policy implementation for Digital Service Providers (DSPs) is certainty, which requires passing legislation and finalising technical documentation before development begins.

1 July 2026 is not achievable for implementing changes and transitioning all employers

DSPANZ believes that the 1 July 2026 commencement date is not achievable for all DSPs to implement the current scope of changes and transition all employers.

We recommend that Payday Super commences 2 years after the legislation passes to provide sufficient time for DSPs to develop, implement and test the required changes before beginning to transition employers. Without changing the commencement date, there will be less than 12 months to implement changes and transition all employers.

However, the changes will impact our members differently, and successfully implementing Payday Super requires careful sequencing of the changes for each participant in the contribution supply chain.

Feedback from our members has shown that:

• Gateways and clearing houses are confident they can move quickly to support Payday Super requirements.
• Payroll software providers will require additional time to implement and then support, educate and transition all employers.

There is an opportunity for the ATO to require gateways and clearing houses to be ready before the commencement date to support DSPs and super funds with their implementations.

If the commencement date does not change, the scope must be reduced

Since Payday Super was first announced in 2023, DSPANZ has consistently provided feedback that the current scope cannot be implemented by the 1 July 2026 commencement date.

If the commencement date for Payday Super remains as 1 July 2026, DSPANZ believes that moving to monthly SG contributions would enable the current processes and technology to continue to be used and is the most practical path to more frequent super payments within this timeframe.

We would then advocate for further consultation across key stakeholders to implement technology reforms that can deliver on the government’s Payday Super policy objectives and support the transition of gateways, clearing houses, super funds, payroll software providers and, most importantly, employers.  

Data quality is key to the success of Payday Super

The vast majority of employers try their best to be compliant with their SG obligations.

For Payday Super to succeed, we should design a system where it is easier for employers to “get it right” and where services are available that provide validated, accurate information when an employee is onboarded and before the first payroll occurs.

The government has allocated $400 million to the ATO for SG compliance and re-designing the SG charge. There is no funding for developing new services to support employers with access to information that will improve efficiency in processing and enable SG contributions to be processed by super funds the first time and every time.

DSPANZ continues to call on the government to invest in upfront data services that will benefit all employers in meeting their SG obligations.

Feedback on draft legislation and implementation

We recommend that the Treasury works with DSPANZ to determine a better cost analysis and impact framework for DSPs implementing policy changes. This framework would support future policy conversations and how changes are delivered across the economy. 

Commencement Date

• Moving all stakeholders will require 2 years after legislation is enacted and ATO technical documents are finalised.
• DSPs will have different readiness requirements, depending on the products and services they provide. The timeframe should reflect the sequencing of changes required to support each participant in the contribution process with their implementations and then transition employers.

Calendar days should be business days

• The legislation should only reference business days to remove confusion for employer operations and better align with existing legislated timeframes for employers and super funds. 

Qualifying Earnings (QE)

• Introducing QE and QE day as a concept will require investment in employer education to understand this term and how it interacts with Ordinary Time Earnings (OTE).
• A new STP pay event may be required to assist with the change management for employers and reduce the likelihood of errors.

SG compliance

• DSPs will be fundamental in helping to reduce the administrative burden for employers surrounding the SG charge. However, they are limited in how they can provide prompts and nudges about SG obligations as these are considered as providing tax advice under the Tax Agent Services Act 2009.
• Employers should not be penalised for unintentional errors that may arise as they transition to Payday Super. The government should consider a 12 month grace period to support employers trying to ‘get it right’.

Processing SG contributions

• The explanatory materials should clarify if super funds can only match contributions using the mandatory set of information included in the legislation - full name, date of birth, residential address, tax file number and telephone number.
• Super funds must have consistent member matching processes - SG contributions should be able to be allocated or returned quickly to the employer.

Exceptional circumstances

• Any outage or incident across the super ecosystem has the potential to impact an employer meeting their SG obligations. Exceptional circumstances should not be exclusively limited to those that are widespread or affect multiple employers, given the penalties involved.

Advertising during onboarding

• The proposed changes to limit advertising to MySuper and default employer products allow DSPANZ members to continue providing onboarding products that present fund information to employees during onboarding.
• The definition of advertising within the legislation needs to be clarified to provide clear guidelines.

Employee onboarding

• The draft changes to enable employers to access employee stapled fund information before the choice of super fund process are unlikely to achieve the intended policy objectives without changes to how the employment relationship is created within ATO systems.

Access a full copy of the submission.