Treasury has released draft legislation for Payday Super, which will require employers to pay superannuation when they pay employee wages, starting 1 July 2026. Under the new rules, employers must make super contributions within seven days of paying wages, instead of the current 28-day deadline.
The draft also introduces the term “qualifying earnings” (QE), which relates to ordinary time earnings, and the “QE day,” which is the payday. If contributions aren’t received by the employee’s super fund within seven days, employers may face the superannuation guarantee charge (SGC), with a few exceptions.
Other changes include a shift in interest rates for shortfalls, from a fixed 10% rate to the ATO’s General Interest Charge (GIC), and changes to the $20 administration fee, which will be replaced with a 60% surcharge based on the total shortfall and interest. SG statements will no longer be mandatory, but employers may still make voluntary disclosures to reduce penalties.
Employers will also be able to deduct both on-time and late contributions, but penalties will remain non-deductible. A new penalty regime is being proposed for late or non-payment of SGC, with penalties starting at 25% and potentially rising to 50% for repeat offences. Unlike the current system, these penalties cannot be reduced.
Starting 1 July 2026, small businesses will need to make direct super payments to funds, as the Small Business Superannuation Clearing House will be phased out.
Tax Arrangements for Managed Investment Trusts
The Government is updating income tax laws to ensure that legitimate investors can continue to benefit from concessional withholding tax rates on distributions from management investment trusts (MITs) while also preventing misuse. Genuine, foreign-based widely held investors, such as pension funds, will still be able to access concessional withholding tax rates on eligible distributions to members through MITs.
Trusts that are owned by a single widely-held investor, such as a foreign pension fund, will remain eligible for MIT concessions. Additionally, the ATO has released TA 2025/1, which informs taxpayers that it is focusing on those who engage in non-commercial restructures to claim MIT withholding tax benefits improperly.
An Innovative Digital Asset Industry Development
A statement on an Innovative Digital Asset Industry development has been issued by the Government, which showcases the Government’s new approach to digital assets. Here are the main aspects of this approach for digital asset reforms:
- A framework for Digital Asset Platforms (DAPs), which are online platforms that store digital assets like cryptocurrency for consumers
- A framework for payment stablecoins, which will be classified as a type of Stored-Value Facility (SVF) under the Government’s Payments Licensing Reforms
- A Review of Australia’s Enhanced Regulatory Sandbox
- A range of initiatives to explore the potential advantages of digital asset technology across financial markets and the wider Australian economy.
Additionally, the Board of Taxation published its Review of the Tax Treatment of Digital Assets and Transactions in Australia report. The report generally concluded that Australia’s existing tax laws can accommodate the taxation of crypto assets and transactions without the need for new legislation. Any uncertainties regarding the application of tax laws to crypto assets and transactions should be addressed administratively, with cooperation between taxpayers and the ATO under the current legal framework.