Question 1

What is Payday Super and when does it start in Australia?

Accepted Answer

Payday Super is an Australian Government reform that changes when employers must pay superannuation contributions for their employees. Currently, employers are required to pay super at least quarterly into employees' nominated super funds. From 1 July 2026, this changes fundamentally — super must be paid on the same day as wages and received by the employee's super fund within 7 business days of each pay run. This reform eliminates the quarterly timing gap that some businesses have relied on as a short-term working capital buffer and introduces real-time ATO monitoring of super payments via STP Phase 2 reporting. Non-compliance will trigger the Superannuation Guarantee Charge (SGC), which includes the unpaid super, an interest charge, and an administration fee — and critically, unlike ordinary super contributions, SGC amounts are not tax deductible. The Small Business Superannuation Clearing House (SBSCH) will also close permanently on 1 July 2026.

Question 2

What is the current superannuation rate for Australian employers?

Accepted Answer

The Superannuation Guarantee (SG) rate for Australian employers is 12% of each employee's ordinary time earnings as of 1 July 2025. This rate applies to all eligible employees — generally those earning at least $450 per month, though this minimum earnings threshold was removed for most employees. The 12% rate represents the mandatory employer contribution that must be paid into each employee's nominated superannuation fund by the due date. Ordinary time earnings generally means the wages paid for an employee's ordinary hours of work, excluding overtime. Salary sacrifice arrangements and other voluntary contributions are separate from the 12% mandatory SGC obligation. From 1 July 2026, the timing of these contributions will also change under the Payday Super reform — requiring super to be paid on each payday rather than quarterly.

Question 3

What is STP Phase 2 and is my Australian business required to comply?

Accepted Answer

STP Phase 2, or Single Touch Payroll Phase 2, is the current ATO payroll reporting framework requiring all Australian employers to submit detailed payroll data to the ATO in real time — on or before each payday. STP Phase 2 expanded on the original STP reporting to include more detailed income type classifications, disaggregated gross wages, allowances, overtime, and salary sacrifice amounts, as well as superannuation data. All Australian employers with at least one employee are required to be STP Phase 2 compliant — there are no size exemptions. Each STP report sent to the ATO replaces the old annual payment summary process, and employees can view their year-to-date payroll data through MyGov. Growwth Partners processes STP Phase 2 reports for every client payroll run, with pre-lodgement validation to ensure data accuracy before submission

Question 4

What is payroll tax in Australia and does my business need to pay it?

Accepted Answer

Payroll tax is a state-based tax levied on total wages paid by an employer, including salaries, wages, bonuses, allowances, superannuation contributions in some states, and certain contractor payments. It applies once total wages exceed each Australian state or territory's annual threshold, which varies significantly — from approximately $700,000 in Western Australia to $1.2 million in Victoria and $1.25 million in New South Wales. If your business employs staff in multiple states, each state calculates payroll tax based on the proportion of wages paid in that jurisdiction. Payroll tax is often overlooked by growing businesses until they unexpectedly cross the threshold — and backdated liability, penalty, and interest can be significant. Growwth Partners monitors payroll tax thresholds for all clients across every state, and manages lodgements when the obligation is triggered.

Question 5

What happens if a business pays super late in Australia?

Accepted Answer

Paying superannuation late in Australia triggers the Superannuation Guarantee Charge (SGC) — a penalty regime that is deliberately punitive. The SGC consists of three components: the unpaid superannuation amount itself (calculated on total salary and wages, not just ordinary time earnings — which is a broader base than the standard SG calculation); an interest charge of 10% per annum on the unpaid amount from the start of the quarter in which it was due; and a $20 administration fee per employee per quarter. Critically, SGC amounts are not tax deductible — unlike ordinary super contributions, which are deductible. Late super also breaches the employer's obligations under the Fair Work Act for employees covered by Modern Awards. From 1 July 2026, the Payday Super reform will tighten these obligations further, requiring super to be paid on each payday with ATO monitoring in real time through STP.

Question 6

How does outsourced payroll work for Australian businesses?

Accepted Answer

Outsourced payroll for Australian businesses means a professional payroll provider manages the complete payroll function on your behalf — from processing pay runs and calculating PAYG withholding through to STP Phase 2 reporting to the ATO, superannuation contributions via SuperStream, payslip distribution, leave balance management, and payroll tax lodgements in relevant states. The process typically works as follows: you or your HR team submit timesheets, leave requests, and any pay changes for the period; the payroll provider calculates wages, applies the correct award rates, deducts PAYG withholding, and calculates super; pay runs are processed, STP Phase 2 reports are submitted to the ATO, and payment files are generated for your bank. Growwth Partners also reconciles every payroll run back to your general ledger and includes payroll workpapers in month-end accounting closes — so your payroll and accounting records are always aligned.

Question 7

What Modern Awards apply to Australian businesses and why do they matter for payroll?

Accepted Answer

Modern Awards are legally binding documents that set out the minimum pay rates, penalty rates, overtime entitlements, allowances, and conditions of employment for employees in specific industries or occupations across Australia. There are over 120 Modern Awards covering different industries — including the Clerks Private Sector Award, the Professional Employees Award, the Retail Industry Award, the Restaurant Industry Award, the Building and Construction General On-site Award, and many others. Employers must apply the correct Modern Award (or enterprise agreement) for each employee classification — failure to do so can result in underpayment claims under the Fair Work Act, which can attract significant penalties and require back-payment of wages plus interest. Getting payroll right for Australian businesses requires knowing which Award applies to each employee, interpreting its provisions correctly, and updating pay rates each time Awards are varied — typically annually from 1 July. Growwth Partners manages Award compliance for all client payroll engagements.

Question 8

How should Australian businesses prepare for Payday Super before July 2026?

Accepted Answer

Australian businesses should take six specific steps to prepare for the Payday Super reform ahead of 1 July 2026. First, audit your current payroll system to confirm it is STP Phase 2 compliant and capable of processing super contributions on each payday — systems that required manual intervention for quarterly super payments will need to be upgraded or replaced. Second, if you currently use the Small Business Superannuation Clearing House (SBSCH), begin transitioning to an alternative SuperStream-compliant clearing house immediately, as SBSCH closes permanently on 1 July 2026. Third, review your cash flow forecasting to account for the shift from quarterly to per-payrun super — this eliminates the quarterly super float that some businesses have relied on and requires super funds to be available in each pay cycle. Fourth, audit your employee records — super fund details, tax file numbers, employment classifications, and ordinary time earnings definitions — to ensure accuracy before Payday Super begins. Fifth, update your payroll calendar to incorporate super payment processing within 7 business days of each pay run. Growwth Partners is already executing this preparation process for all payroll clients and offers a free Payday Super readiness review for any business unsure of its current position.

Payroll Services in Australia — STP Phase 2 Compliant, Payday Super Ready, Error-Free Every Run

Trusted over 200+ startups/businesses around the world

What Our Australian Payroll Services Include

Salary and Wage Processing

Single Touch Payroll (STP Phase 2) Reporting

Superannuation Compliance — Including Payday Super

PAYG Withholding Management

Payroll Tax Compliance Across All States

Payslip Generation and Employee Records

WorkCover Registration and Leave Management

Payday Super — Is Your Business Ready?

Who Our Payroll Services Support

Why Businesses Choose Growwth Partners for Payroll

Zero Late Payments, Zero ATO Penalties

Modern Award Compliance

Fully Integrated with Your Accounting

Frequently Asked Questions

CFO, tax & AI finance for Australian businesses

Virtual CFO Australia

Financial Modelling Australia

AI Financial Forecasting Australia

Corporate Tax Filing Australia

Bookkeeping Services Australia

Virtual CFO Services Australia

Payroll Errors Cost More Than Getting It Right the First Time.