Tax and super: how small businesses need to prepare now

This year is shaping up as one of the biggest for tax and superannuation reform.

Several major changes begin on 1 July, so small businesses that aren’t prepared, face compliance headaches, cash flow pressure and ATO scrutiny. Here’s what you need to know.

Super must be paid every pay day

The most significant change is the introduction of Payday Superannuation. Payday Super will help employers meet their super guarantee (SG) obligations and help protect the retirement funds of millions of Australians.

From 1 July, employers must pay super at the same time as wage and salary payments.ⁱ

That means Super Guarantee (SG) contributions must be in an employee’s account within seven business days of each pay day.ⁱⁱ

For new employees, or those paying to a new super fund, you have 20 business days for the first payment to reach the account.

The new rules also include changes to how you calculate and report contributions.

Super will be calculated at 12 per cent of qualified earnings (QE). These include ordinary time earnings; salary sacrifice contributions and certain payments to contractors who are treated as employees.

You must include the year-to-date (YTD) amounts of QE and super liability in each Single Touch Payroll report.

SuperStream messaging upgrades

From 1 July 2026 there are changes to the contributions messaging used in the SuperStream system, which is the electronic standardised format you must use to pay super contributions.

The messaging changes include clearer error messaging and are designed to reduce the likelihood that your employee contributions are rejected by a super fund.

What employers need to do

The ATO is urging small businesses not to leave preparations to the last minute. Payday Super will increase your administrative workload and payroll processes will need to change.

1. Confirm employee super fund details are current and correct
2. Check your default super fund’s registration details are up to date
3. Consider paying super contributions more frequently now to identify any errors or problems with rejected contributions before the rules change
4. Review your payroll software and internal systems to make sure they’re ready to support Payday Super and the SuperStream changes
5. If you currently use the Small Business Superannuation Clearing House, be aware that it closes on 1 July 2026 and you’ll need to make new arrangements
6. Read about the changes to SuperStream and the New Payments Platform

And, an important note for those who currently pay super quarterly; you should model the impact of the more frequent payments now to check how your cash flow will be affected after 1 July. For small businesses that have tight profit margins, you will need to plan carefully and potentially create a business forecast to manage your cash flow.

New lower tax rates

From 1 July 2026, the tax rate for individual income between $18,201 and $45,000 will fall from 16 per cent to 15 per cent, with a further reduction to 14 per cent from 1 July 2027.ⁱⁱⁱ

Make sure your payroll system is ready for the change and that the correct amounts will be withheld from employees’ wage and salary payments from the first pay run.

Also, check that the new rates do not affect other payroll calculations such as salary packaging or super contributions.

Earnings tax on high balance super accounts

Some small businesses also need to be aware the Better Targeted Superannuation Concessions (BTSC) measures start from 1 July 2026.

Following recent amendments, the BTSC for high balance fund members now includes a second threshold on super accounts over $10 million, with a concessional 30 per cent tax rate applying on the proportion of earnings corresponding to total superannuation balances (TSBs) between $3 million and $10 million.

A new 40 per cent tax rate applies on earnings from the portion of the TSB over $10 million. The earnings tax only applies to ‘realised’ gains on assets, such as when interest is earned or a property is sold.

For our help preparing for the upcoming tax and super changes, contact Carrick Aland in Dalby, Toowoomba or Chinchilla today.

Sources

i Payday superannuation | Australian Taxation Office

ii Spotlight on… Payday Super | Australian Taxation Office

iii Personal income tax – new tax cuts for every Australian taxpayer | Australian Taxation Office