Payday Super FAQs
Payday Super is now in effect for Australian employers. This FAQ is designed to help anyone supporting Payday Super webinars and customer conversations.
1. Payday Super
Q: When did Payday Super come into effect?
Payday Super came into effect on 1 July 2026.
Employers now generally need to pay Superannuation Guarantee contributions alongside each pay cycle, rather than quarterly.
Q: What is the seven business day rule for super payments?
Under Payday Super, super contributions must generally be received by the employee’s super fund within seven business days of payday, unless an extended timeframe applies.
The ATO considers a contribution on time once the fund has received both the money and the information needed to allocate it.
When paying into an employee’s super fund for the first time, most commonly for a new employee or when an employee changes fund, employers will generally have up to 20 business days.
The Tax Commissioner may also apply discretion in exceptional circumstances, such as significant natural disasters or widespread technology, banking or telecommunications outages.
Q: What happens if super is paid late?
If super isn't received by the employee’s fund within the required timeframe, the employer may need to take steps to correct the payment and notify the ATO.
The ATO has published guidance outlining a practical, risk-based approach to compliance during the first year of Payday Super. Employers who make genuine efforts to meet their obligations and resolve issues quickly are considered lower risk than employers who make no attempt to pay or leave issues unresolved.
If a late payment occurs, employers should act quickly to rectify it and may wish to speak with their tax or BAS agent about any further steps required.
2. How super payments work in Xero
Q: How long do super payments take to reach super funds?
auto super is designed to help customers meet Payday Super timelines, with contributions typically paid to funds within four business days.
| Action | Status in Xero | |
|---|---|---|
| Business day 0 | The authoriser approves the batch and the status in Xero changes to Approved, pending processing. SuperChoice also starts processing the direct debit. If the auto super batch is approved after the banking cut-off of 4pm AEST, the direct debit is processed on the next business day. | Approved, pending processing |
| Business days 1–3 | The funds are awaiting clearance, which can take up to three banking days. | Approved, pending processing |
| Business day 4 | Typically this is when SuperChoice sends the payment to the super funds and the status in Xero updates to Paid. | Paid |
| Business days 5–7 | The super funds allocate contributions to member accounts. | Paid |
*Business days don't include weekends or public holidays.
Q: What does a super payment showing as 'Paid' in Xero mean?
A batch showing as Paid means the super fund has successfully received the funds.
The contribution may still be in the process of being allocated to the employee’s individual super account. It is up to the super fund to allocate the contribution once the funds have been successfully received.
Q: What should I do if a payment takes longer than expected?
If a payment batch has taken longer than seven business days to process since it was authorised, raise a case with Xero Support so we can investigate.
Q: Can I get proof that a super payment was received by the fund?
Xero provides an exportable Superannuation Payments report, available in Reporting.
The report captures the date the payment was successfully credited to the super fund in the Sent To Fund column.
The Sent To Fund column will be blank if the payment was made outside auto super, for example if it was manually marked as paid.
The report can be exported to PDF, Excel or Google Sheets.
3. Auto super authorisers
Q: Can I have more than one auto super authoriser?
You can add multiple eligible authorisers to your auto super registration. When submitting an auto super payment, you can select which nominated authoriser will approve that payment.
To be added as an authoriser, a user needs to have:
- the Payroll Admin user role
- permission to make banking decisions
You can add as many eligible authorisers as required.For instructions on adding or managing authorisers, see Edit auto superannuation registration details on Xero Central.
Q: Does having multiple authorisers mean two people need to approve a payment?
No.
The functionality provides alternative authorisers, rather than dual approval.
You can nominate multiple eligible people but each auto super submission only needs one authoriser to approve it.
This means another nominated person can approve a payment if the usual authoriser is unavailable.
4. Returned payments and payment processing
Q: What happens if a super contribution can't be allocated?
From 1 July 2026, super funds are required to return unallocated Superannuation Guarantee contributions within three business days.
This allows employers to identify and resolve issues more quickly, reducing delays and helping ensure employees receive their super as intended.
Q: How does Xero handle rejected or returned contributions?
When a super fund is unable to allocate funds to a member account, it returns the payment with an error response to Xero's third-party clearing house, SuperChoice.
Once this information is received, Xero notifies the customer by email that the super payment has been returned.
The reason for the return, for example incorrect fund details, appears in the returned super batch in auto super.
Customers need to work with the employee to correct the issue before resubmitting the payment.
Refer to the Xero Central article Reprocess failed or returned auto super payments for more information.
Q: What is a Member Verification Request?
A Member Verification Request, or MVR, allows a software solution to verify that an employee’s super fund details are valid and can be accepted by their super fund before a contribution is made.
This is designed to help identify incorrect or mismatched information before money is sent, reducing the risk of rejected contributions.
MVR is part of the broader SuperStream changes introduced to support Payday Super.
Xero plans to support MVR and will share more details on timing as development progresses.
Q: Is Xero planning to implement NPP or real-time payments for super contributions?
Xero continues to work with our clearing house provider and industry partners to support efficient processing of super contributions under Payday Super.
Our current focus is on helping customers meet Payday Super requirements using the existing SuperStream framework and improving processing efficiency within that system.
We continue to monitor developments in payment infrastructure, including the adoption of the New Payments Platform by parts of the superannuation industry.
Faster payment options may offer benefits over time but can also introduce additional cost and operational complexity, so Xero is taking a considered approach as the industry evolves.
5. Qualifying earnings
Q: What are qualifying earnings under Payday Super?
Qualifying earnings, or QE, are the earnings base used to calculate Superannuation Guarantee contributions from 1 July 2026.
Employers calculate super as 12% of an employee’s qualifying earnings for each pay period.
Qualifying earnings bring together:
- Ordinary time earnings, such as pay for ordinary hours, many types of paid leave and some allowances and bonuses
- All commissions paid to an employee
- Salary sacrifice amounts that would have been qualifying earnings if paid as cash
- Payments to some contractors who are treated as employees for super purposes
For many employers, the move to qualifying earnings won't substantially change the amount of super they pay but it is important that payroll is set up correctly so the right payments are included.
Employers must report both qualifying earnings and super liability through Single Touch Payroll.
Q: Did Payday Super change what counts as ordinary time earnings?
No.
The definition of ordinary time earnings, or OTE, did not change under Payday Super.
OTE still covers pay for ordinary hours of work, including certain allowances, paid leave types and bonuses. Overtime continues to be excluded from OTE when ordinary hours are clearly identified in an award, agreement or contract.
What changed is that super is now calculated on qualifying earnings, which uses OTE as its base and adds some additional categories such as commissions and qualifying salary sacrifice amounts.
Q: Do I have to pay super on overtime under Payday Super?
In most cases, overtime that is clearly identified and paid at overtime rates isn't included in qualifying earnings, so super isn't calculated on those amounts.
If an employee’s ordinary and overtime hours aren't clearly separated in their award, agreement or contract, the ATO may treat all hours as ordinary hours. In that case, super may be calculated on all those earnings.
Xero can't give legal advice on how a specific award should be interpreted, so customers should refer to the ATO, Fair Work or their advisor for detailed guidance.
Q: Do salary sacrifice contributions count as qualifying earnings?
Yes, in many cases.
Amounts that an employee salary sacrifices to super are included in qualifying earnings if the underlying payment would have been qualifying earnings when paid as cash, such as regular salary or a commission.
If an employee salary sacrifices amounts that wouldn't have been qualifying earnings, those sacrificed amounts aren't included in qualifying earnings.
6. Small Business Superannuation Clearing House
Q: What happened to the Small Business Superannuation Clearing House?
The ATO’s Small Business Superannuation Clearing House, or SBSCH, closed permanently on 1 July 2026.
The SBSCH had been designed around quarterly super payments and wasn't suited to the more frequent payment cycles introduced under Payday Super.
Businesses that previously used the SBSCH now need to use an alternative super payment solution.
Integrated solutions like Xero's auto super allow businesses to calculate and pay super within their existing payroll workflow.
Q: Can I pay super by credit card?
No.
Credit card payments can't be used for superannuation contributions through SuperStream.
Businesses that previously used a credit card through the SBSCH need to use a bank account for their super payments instead.