Your business may be closer to payroll tax registration than you think. For many Queensland business owners, payroll tax is something they assume only applies to “big” businesses. But as your team grows, wages increase, contractor arrangements expand or related entities become more complex, payroll tax can become relevant much sooner than expected.

The issue is that payroll tax is not based only on ordinary employee wages. Depending on your circumstances, taxable wages may include salaries, superannuation, bonuses, allowances, directors’ fees, certain contractor payments and wages paid across related entities.

That means a business can reach the Queensland payroll tax threshold without realising it.

If your business is growing, hiring, restructuring or operating through multiple entities, now is the time to understand your obligations and plan ahead.

What is payroll tax?

Payroll tax is a state-based tax that applies to employers whose taxable wages exceed the relevant threshold. In Queensland, payroll tax is administered by the Queensland Revenue Office, not the Australian Taxation Office.

This is an important distinction. Payroll tax is separate from income tax, GST, PAYG withholding and superannuation guarantee obligations. It is calculated based on taxable wages paid by an employer or group of employers.

For Queensland businesses, payroll tax generally becomes relevant when total Australian taxable wages exceed the Queensland threshold.

What is the payroll tax threshold in Queensland?

The current Queensland payroll tax threshold is $1.3 million in annual Australian taxable wages.

However, this does not mean you can wait until the end of the financial year to think about payroll tax. You may need to register once your Australian taxable wages, or your group’s Australian taxable wages, exceed $25,000 a week.

This is where many growing businesses get caught. Payroll tax registration is not just an end-of-year issue. If your wages are increasing during the year, you may need to monitor your position monthly.

You should also be aware that the threshold applies to Australian taxable wages. This means wages paid in other Australian states and territories may need to be included when assessing whether your business exceeds the Queensland threshold.

What is the current payroll tax rate in Qld?

The current Queensland payroll tax rate depends on the amount of Australian taxable wages paid by your business or group of businesses.

The payroll tax rate is:

• 4.75% for employers, or groups of employers, with Australian taxable wages of $6.5 million or less
• 4.95% for employers, or groups of employers, with Australian taxable wages of more than $6.5 million

Regional employers may also be entitled to a 1% discount on the payroll tax rate until 30 June 2030, provided they meet the eligibility requirements.

It is also important to note that larger employers may have additional obligations under Queensland’s mental health levy, which applies to employers or groups with annual Australian taxable wages above the relevant levy threshold.

For growing businesses, the key point is that payroll tax is not a flat cost you should only think about once a year. As wages increase, the rate, available deductions, regional eligibility, grouping rules and potential levy obligations can all affect the final amount payable.

Why growing businesses often underestimate payroll tax exposure

Many business owners assume payroll tax only applies once base wages exceed $1.3 million. In practice, the calculation can be broader than expected.
Your business may be closer to the threshold if you have:

• increased headcount over the past 12 months
• awarded pay rises or bonuses
• expanded into another Queensland location
• hired senior staff on higher salaries
• paid directors’ fees or management fees
• increased employer superannuation contributions
• engaged contractors who may be caught under payroll tax rules
• used multiple entities to run different parts of the business
• acquired or merged with another business
• employed staff in more than one state or territory

A business with 15 to 20 employees may be much closer to the threshold than the owners realise, especially once superannuation, bonuses, allowances and other taxable wage components are included.

What counts as taxable wages for Queensland payroll tax?

Taxable wages can include more than ordinary salaries. Depending on your circumstances, taxable wages may include:

• gross salary and wages
• annual leave, sick leave and long service leave payments
• bonuses and commissions
• allowances
• directors’ fees
• employer superannuation contributions
• fringe benefits
• termination payments
• apprentice and trainee wages, unless exempt
• certain contractor payments
• wages paid by related or grouped entities

This is why payroll tax planning should not be based on a simple wages figure pulled from your payroll system without review. The right calculation depends on what has been paid, who it has been paid to and whether any exemptions apply.

Contractor payments can be a hidden payroll tax risk

One of the most misunderstood areas of payroll tax is contractor payments.

Many business owners assume that if someone is a contractor, payments to that person or entity are automatically excluded from payroll tax. That is not always the case.

In Queensland, payments to contractors may be taxable if the arrangement is considered a relevant contract for payroll tax purposes. This can be an issue for businesses that rely heavily on contractors, consultants, subcontractors, allied health practitioners, medical practitioners, IT specialists, sales agents, trades or professional service providers.

There are exemptions that may apply, but these need to be assessed carefully. It is not enough to simply label someone a contractor or have them invoice through an ABN.

If your business uses contractors regularly, you should review:

• what services the contractor provides
• whether the contractor works mainly for your business
• whether the contractor supplies labour, materials or equipment
• how the contract is structured
• how payments are made
• whether any contractor exemption applies
• whether your records are strong enough to support your position

Contractor arrangements are an area where early advice can make a significant difference.

Grouping rules: the threshold may not apply separately to each business

Another major payroll tax trap is grouping.

If your business is related or connected to another business, the Queensland Revenue Office may treat the businesses as one group for payroll tax purposes. This means the $1.3 million threshold may apply to the group’s combined Australian taxable wages, rather than to each entity separately.

This can catch business owners by surprise.

For example, you may operate:

• two cafes or restaurants under separate entities
• a trading company and a service entity
• a professional practice and an associated administration company
• multiple businesses owned or controlled by the same family group
• a business with shared employees, directors or resources
• related companies with common ownership or control

Even if each individual entity is below the threshold, the group as a whole may exceed it.

This is especially important for growing businesses with multiple locations, related entities or family ownership structures.

Payroll tax grouping can significantly change your registration and payment obligations.

When do you need to register for payroll tax in Queensland?

You generally need to register for payroll tax in Queensland if you employ in Queensland and your total Australian taxable wages, or your group’s total Australian taxable wages, are above the payroll tax threshold.

You may also need to register within seven days after the end of the month in which your Australian taxable wages exceed $25,000 a week.

This means business owners should not wait until annual accounts are prepared to assess payroll tax. By then, the registration deadline may have passed.

If your wages are trending upwards, it is worth reviewing your payroll position before the threshold becomes an issue.

What happens if you miss the payroll tax threshold?

Missing the payroll tax threshold can create several problems.

Your business may need to:

• lodge late payroll tax returns
• pay backdated payroll tax
• pay interest or penalties
• respond to Queensland Revenue Office enquiries
• reconstruct payroll and contractor records
• deal with unexpected cash flow pressure
• review historic grouping or contractor arrangements

For a growing business, an unexpected payroll tax liability can be disruptive. It can affect hiring plans, profit forecasts, cash flow and future investment decisions.

The earlier you identify the risk, the more options you have.

How to prepare before your business reaches the payroll tax threshold

If your business is growing, payroll tax should be part of your broader financial planning.

Here are some practical steps to take.

1. Forecast your annual taxable wages

Do not rely only on last year’s payroll figures. Look at your current wage run rate and project where your business will be by the end of the financial year.

Make sure your forecast includes:

• expected new hires
• pay increases
• bonuses and commissions
• superannuation
• directors’ fees
• allowances
• interstate wages
• contractor payments that may be taxable

A forward-looking forecast can help you identify whether you are likely to cross the threshold before it happens.

2. Review your payroll categories

Your payroll system may not automatically categorise every payment correctly for payroll tax purposes.

Review whether your reporting captures the right information for:

• salaries and wages
• leave payments
• superannuation
• bonuses
• allowances
• fringe benefits
• termination payments
• directors’ fees
• apprentice or trainee wages
• exempt wages

This will make registration, monthly returns and annual reconciliation much easier if payroll tax becomes payable.

3. Check whether contractor payments need to be included

If your business uses contractors, do not assume those payments are outside payroll tax.

Review your contractor arrangements and determine whether any payments may be taxable under the relevant contract rules. Where an exemption applies, make sure you keep the right records to support your position.

This is particularly important for medical, dental, allied health, construction, consulting, IT and professional services businesses.

4. Review your business structure for grouping risks

If you operate through more than one entity, payroll tax grouping should be reviewed before your wages exceed the threshold.

Consider whether your entities have:

• common ownership
• common directors or controllers
• shared employees
• shared premises
• shared administration
• related financial arrangements
• service agreements between entities
• family or trust connections

If grouping applies, the combined wages of the group may determine your payroll tax obligations.

5. Build payroll tax into your cash flow planning

Payroll tax is an additional employment cost. If your business is close to the threshold, it should be included in cash flow forecasts and budgets.

This is particularly important if you are:

• hiring new staff
• expanding into new locations
• taking on larger contracts
• acquiring another business
• restructuring your operations
• growing quickly after a period of lower wages

By planning ahead, you can avoid treating payroll tax as a surprise cost.

6. Get advice before registration becomes urgent

Payroll tax can be complex, especially where contractors, grouping, interstate wages or exemptions are involved.

Seeking advice early can help you:

• understand whether you need to register
• calculate taxable wages correctly
• identify exemptions
• manage contractor risks
• review grouping issues
• prepare for monthly lodgements
• avoid penalties and backdated liabilities
• forecast the cash flow impact

For many businesses, the best time to get advice is before the threshold is reached, not after.

Payroll tax and business growth: a sign your systems need to mature

Reaching the payroll tax threshold is often a sign that your business has grown beyond the systems and structures that worked in the early stages.

At this point, business owners often need stronger processes around:

• payroll reporting
• management accounts
• cash flow forecasting
• contractor management
• entity structures
• compliance calendars
• budgeting
• tax planning

Payroll tax is not just a compliance issue. It is a signal that your business is entering a more complex stage of growth.

With the right advice and systems in place, you can manage your obligations with more confidence and avoid costly surprises.

How MGI South Qld can help

At MGI South Qld, we help Queensland businesses understand, plan for and manage their tax and compliance obligations as they grow. Three things we always tell our clients about payroll tax:

1. It is possible to reduce payroll tax but we need a bit clever 
2. Contractors are by definition caught unless they meet one of the 9 exemptions
3. Because payroll tax registration / calculation is made on Australia wide wages, even if you don’t hit the $1.3m in Queensland but only have $1.2m. Because the $1.2m is higher than other states, as soon as you hire an inter-state employee (say in Victoria where the threshold is $1m) – you’ll end up with a payroll tax bill in that state.

Our team can assist with:

• payroll tax registration advice
• payroll tax threshold reviews
• taxable wages calculations
• contractor payment reviews
• grouping assessments
• cash flow forecasting
• business structuring advice
• tax planning
• business advisory support

If your business is approaching the Queensland payroll tax threshold, or you are unsure whether your current structure creates payroll tax exposure, it is worth getting advice early.

Speak to the team at MGI to review your position and plan ahead with confidence.

In light of the current international situation and ongoing fuel supply disruptions, on 30 March 2026, the Australian Government announced the National Fuel Security Plan. To support the plan the Australian Taxation Office (ATO) has announced a series of temporary measures from 1st April to support individuals and businesses. 

The ATO recognises that high fuel costs are affecting some businesses and will provide targeted support to eligible businesses that are unable to meet their payment obligations for three months, until 30 June 2026. This includes:

• streamlined access to more flexible payment plan arrangements, including longer payment terms, no upfront payment, and access to general interest charge (GIC) remission where payment and lodgement conditions are met.
• remission of GIC and other penalties: high fuel costs will be a relevant factor in consideration of additional requests for remission.
• support to vary pay as you go (PAYG) instalments where there has been a reduction in taxable income.

During this period, the ATO’s compliance approach will be guided by careful consideration of taxpayers’ circumstances and the current environment.

Businesses and their tax professionals can now assess their eligibility and notify the ATO of their interest in accessing a tailored payment plan and intention to vary PAYG instalments through the ATO’s online services. The ATO will then contact these businesses or their representatives with more information and next steps.

Eligibility to apply for the ATO fuel response payment plan

You are eligible to apply for the ATO fuel response payment plan if you are an ABN holder who meets the following 4 criteria:

1. You have experienced an increase in business operating costs and these costs are either
   1. directly attributable to higher fuel costs
   2. indirectly attributable to high fuel costs because of increased transport, logistics or other supply chain costs.
2. You have a new tax debt, or you are unable to service an existing tax debt.
3. You can demonstrate a reduced capacity to pay due to the high fuel prices. This is separate from a general downturn in business or ordinary cashflow issues. This means that if fuel prices hadn’t been so high, you anticipate you would have been able to meet your payment obligations, including your instalments under existing payment plans.
4. Your lodgments are up to date within 3 months of the payment plan being set up. We may cancel your payment plan if lodgments are not up to date within this period. Up-to-date lodgments are also required for us to make a decision to remit GIC under the fuel response payment plans.

The ATO fuel response payment plan is available by application until 30 June 2026.

The ATO will continue to monitor the situation and communicate whether it plans to continue or change its approach beyond 30 June 2026 as appropriate.

The ATO’s usual support options for businesses having difficulty meeting their obligations continue to be available.

If you are an MGI client and have any questions regarding your eligibility to apply for the ATO fuel response payment plan, don’t hesitate to contact a member of our team.

Division 296 Tax Update – March 2026

The Government has now passed a new Super tax on individuals who have more than $3m & $10m in their Superannuation. This new tax is called “Division 296 Tax” and comes into play from 1 July 2026.

What is Division 296 Tax?

Division 296 tax is a new Superannuation Tax, however assessed to the Individual, with an ability to pay the tax from Super balances. The new tax regime commences on 1 July 2026, essentially charging an extra tax for those individuals with total superannuation balances exceeding $3m & $10m.

Extra tax will be imposed on certain investment earnings of super funds for members whose balances exceed these thresholds. It is not a cap or a tax on the amount of your super balance, however an additional super tax consideration.

Why did the Government Introduce this Tax?

It reduces superannuation tax advantages for those with more than $3m & $10m in super by taxing part of their fund earnings, not the super balance itself. It applies collectively to all super funds held by a member.
Superannuation will be taxed less favourably for those with balances over $3m & $10m.

However, it is important to note that it may still be a better tax environment than other entities and structures. This will obviously depend on your personal circumstances.

How is Division 296 tax calculated?

15% x the proportion of individuals super over $3 million x “Earnings”

Plus

• 10% x the proportion of individuals super over $10 million x “Earnings”
• The proportions are based on the higher balance of the member’s super, at either the start or the end of the financial year.
• There is an exception in the first year (the 2027 Financial Year), where the end-year balance will only be used.
• The thresholds will be indexed by inflation in specified increments.

What are Earnings?

• Earnings include taxable investment income such as rent, dividends (including franking credits), trust distributions, and realised capital gains (after cgt discounts), minus deductible expenses.
• Unlike the original draft of this legislation unrealised capital gains are thankfully excluded.
• Pension Super Funds are included for the purposes of calculating this specific Divison 296 Tax, if the member balances exceed the $3M & $10M amounts,
• Each Superannuation Fund will be required to determine the value of earnings that are attributed to each member. This is likely to be done via the use of an actuarial certificate.

When will this additional tax be levied?

The Superannuation Fund and the Individual will continue to lodge their annual tax returns as they currently do. Once the ATO has received all data and information, they will then contact the individuals and advise them they are liable for this additional tax. This would be separate to any normal Super tax assessments.

The individual can then either pay this tax personally or lodge an election with the ATO for their Superannuation Fund to make payment on their behalf.

Consideration for unrealised assets at 30th June 2026

• The government has acknowledged that there may already be capital growth since acquisition, in certain assets held by superannuation funds.
• There is special relief which allows SMSFs to make an election to “opt in” to record asset values as at 30 June 2026, to only tax growth after that date, preventing taxation of any pre-existing gains.
• An important note that this appears to be a blanket election on ALL Assets, which requires a SMSF to reset the Division 296 Cost Base as at 30th June 2026. There is no ability to cherry-pick the assets.
• To access this relief, SMSFs will need to “opt in” when lodging their 2027 SMSF Annual Return with the ATO.

Planning considerations for Division 296 Tax:

The mechanics and finer detail of this legislation is yet to be released.

Careful tax planning is required. The first year of this tax is based on end-of-year balances as at 30/06/2027, hence giving people time to plan.

Considerations may include:

• Doing nothing and accepting this additional super tax
• Super may still be the best tax environment in comparison to other structures.
• Possibly withdrawing Super to either avoid or reduce the application of this new tax.
• In so doing possibly triggering capital gains tax and other costs within Superannuation
• The ability to meet pension and benefit payments going forward
• Impact on your estate plan
  As the bill is enacted and guidance is supplied by the Australian Government, we will continue to keep you informed with any further updates.

Please reach out to MGI tax accountants and consultants if you have any questions or contact us on (07) 3002 4800.

As Australia prepares for Payday Super, most employers are focused on one question: “Will our payroll software be ready?” Payday Super is not just a technical change. It will change payroll processes. It’s also a people change, a systems change and a governance change. Behind the scenes, employers will need to redesign workflows, elevate data quality, streamline approvals, train staff and tighten controls to avoid compliance risk.

If you are still getting up to speed on what Payday Super is and when it starts, read our guide What Is Payday Super And What Do Employers Need To Think About Now? first, then come back to this article for a deeper look at the operational changes required. 

We will also be running a webinar: Payday Super Changes: What Employers Need to Know Before July 2026  on Thursday 29 January at 1.00pm (AEST). Register now to secure your spot.

Here is what is really involved in getting your processes, systems and people ready.

1. Software Readiness Is Only the Starting Point

Yes, payroll vendors are updating their platforms to calculate and transmit super in real time. That is important, but it is only one element of Payday Super readiness.

Even the best configured system will fail if:

• pay codes are misclassified
• staff enter data incorrectly
• onboarding information is incomplete
• timesheets are late
• the clearing house cannot process payments fast enough

Software is an enabler, not the whole solution. The real work sits in the processes wrapped around the system and the payroll compliance framework you build around it. 

2. Data Integrity: The Single Biggest Risk Under Payday Super

Under quarterly super, payroll teams had a buffer. If an employee’s:

• start date
• termination date
• allowance
• classification
• fund details

were incorrect, there was usually time to fix it before the payment deadline.

With Payday Super, that buffer disappears.

Common data risks include:

• incorrect superable vs non superable pay items
• contractors incorrectly set as “no super”
• missing or invalid fund details
• duplicate employee profiles
• incorrect ordinary hours classifications

Payday Super exposes errors much faster, so data cleansing and stronger data controls must happen now, not after the regime starts. Good data integrity underpins both system performance and payroll compliance.

3. Workflow Redesign: Your Current Process Won’t Be Fast Enough

Payroll teams used to operate on fortnightly or monthly cycles with quarterly super deadlines in mind. Now, super must be paid at the same time as wages.

This requires redesigning:

✔ Timesheet cut-offs – late approvals will now cause late super.

✔ Manager approvals – super cannot wait while managers hunt for roster corrections.

✔ Exception handling – adjustments must be completed within the same pay cycle.

✔ Payroll-to-Super handover – data must flow instantly, not days after payroll is finished

✔ Treasury coordination – Cash must be ready every pay run, not once per quarter. Read our detailed blog: “Cash Flow Planning For Payday Super” for more insights.

Most organisations will need to re-map their entire payroll workflow, from roster to bank to clearing house to general ledger, to ensure it can support the timing rules of Payday Super.

4. Clearing House Selection and Capability

Not all clearing houses are built for high frequency payments. Under Payday Super, employers must consider:

• settlement times (some take three to five days)
• cut off times for same day processing
• integration with payroll software
• reconciliation capability
• reporting accuracy and speed

If your clearing house cannot process payments within your pay cycle, you risk automatic SGC exposure even if your payroll is on time.

Switching clearing houses, or upgrading to a more integrated solution, may be necessary and should be done well before Payday Super begins. This decision should sit alongside broader systems and governance planning, not as a last minute fix.

5. Governance and Documentation: The New Compliance Standard

Payday Super increases regulatory scrutiny. The ATO will have more timely data and employer errors will surface faster.

Employers must strengthen:

• Payroll policies – updated to reflect new timing requirements and roles.
• Delegations and authorisations – clear, documented approval pathways for super payments.
• Reconciliation processes – per pay run, not quarterly.
• Audit trails – every super payment traceable from payroll through to the clearing house and fund.
• Exception handling protocols – documented steps for what happens when errors occur and who is responsible for corrections.

Strong governance is now a core compliance obligation and should sit alongside your broader payroll compliance work. 

6. Staff Training and Communication

The best systems and processes will fail without people who understand and follow them.

Payroll teams need training on:

• real time super timing
• new workflows and cut offs
• rejection and error handling
• data integrity red flags
• system configuration changes

HR teams need training on:

• onboarding data requirements
• contractor classification
• documentation standards
• which changes must be communicated to payroll and when

Managers need training on:

• timesheet cut offs
• approval deadlines
• roster accuracy and its impact on super

Employees need communication on:

• any pay cycle impacts
• super processing timing
• what is changing and what is staying the same

Payday Super is not just an operational change. It is a whole-of-business change that requires clear, consistent communication across multiple teams.

Bringing It All Together: Processes, Systems And People In A Payday Super World

Payday Super will test the maturity of payroll processes across Australia. Software alone will not make an employer compliant.

Success requires:

• clean, accurate data
• redesigned workflows that match the new timing rules
• strong governance and documentation
• the right clearing house and integrations
• trained staff who understand their role
• precise communication across payroll, HR, finance and managers
• real time or per pay run reconciliation and exception management

These process, systems and people changes sit alongside a review of payroll frequency, cash flow planning and payroll compliance as the core pillars of Payday Super readiness. 

Need Support Redesigning Your Payroll To Super Process?

If you want support in redesigning your payroll to super process end to end for Payday Super, our team can help you:

• map your current workflows and identify timing gaps
• review system configuration, clearing house capability and data integrity
• strengthen governance, reconciliation and exception handling
• design and roll out training and communication for payroll, HR and managers

Talk to us about a Payday Super process and systems review, or start with our pillar guide What Is Payday Super And What Do Employers Need To Think About Now? to see how this operational work fits into the broader change. 

Remember to register for our webinar: Payday Super Changes: What Employers Need to Know Before July 2026  on Thursday 29 January at 1.00pm (AEST).

With the introduction of Payday Super, many employers are reassessing whether their current pay cycle – weekly, fortnightly or monthly – still serves them operationally and financially. One question is emerging more frequently: Should we switch to monthly payroll?

Monthly payroll can offer meaningful advantages under the new super regime, but it also has constraints and risks that employers need to consider carefully.

If you are still getting up to speed on what Payday Super is and when it starts, read our guide What Is Payday Super And What Do Employers Need To Think About Now?  first, then come back to this article for a deeper look at payroll frequency decisions

We recently ran a webinar covering the key changes and the playback is available: Payday Super Changes: What Employers Need to Know Before July 2026.

This guide breaks down the key factors to help you decide whether monthly payroll is right for your business under Payday Super.

1. The Case for Monthly Payroll: Key Benefits

✔ Reduced Payroll Administration

Monthly payroll means fewer pay runs per year:

• 12 instead of 26 (fortnightly)
• 12 instead of 52 (weekly)

This reduces:

• processing workload
• approval cycles
• payroll reconciliation volume
• super processing frequency

Under Payday Super, reducing super payment frequency from 26–52 payments down to 12 can significantly cut administrative and payroll compliance pressure.

✔ Smoother Cashflow Management

With fewer pay runs:

• cashflow forecasting becomes more predictable
• super outflows become more structured
• treasury movements reduce
• payroll errors have fewer opportunities to repeat

For businesses with tight or volatile cash cycles, monthly payroll can make cash flow planning easier, provided processes are well controlled.

For a detailed look at how Payday Super affects cash flow, see our guide: Cash Flow Planning For Payday Super: How To Avoid Surprises. 

✔ Better Alignment With Monthly Revenue Cycles

Many businesses bill monthly. Aligning payroll with billing cycles can create:

• more balanced cash conversion cycles
• fewer liquidity dips mid-month
• simpler monthly financial close processes

For organisations with strong monthly revenue patterns, monthly payroll can align outflows and inflows more neatly.

✔ Easier Governance Under Payday Super

Because super must now be paid on payday, monthly payroll means:

• fewer super deadlines
• fewer opportunities for late payments
• easier payroll–super reconciliation
• lower Superannuation Guarantee Charge (SGC) exposure

Monthly payroll is inherently lower risk under Payday Super, provided your payroll systems and controls are set up correctly. Read our blog: Payday Super And Payroll Processes: The Changes You Need To Plan For

2. The Downsides of Monthly Payroll

Despite the advantages, monthly payroll does not suit every business.

✘ Employee Cashflow Pressures

Employees used to weekly or fortnightly pay may struggle with:

• budgeting
• rent and bill cycles
• personal cash flow needs

This can impact morale, increase HR queries and make the change unpopular if it is not supported and communicated well.

✘ Award and EBA Restrictions

Some awards and enterprise agreements require:

• weekly or fortnightly pay
• prescribed timing of payments
• penalty rate calculations based on pay cycles

A move to monthly payment frequency may not be legally permitted, depending on the industrial instrument. Payroll frequency cannot be changed purely for convenience if it conflicts with award, EBA or contract obligations.

✘ Higher Risk if Errors Occur

Because pay cycles are longer under monthly payroll:

• corrections take longer to apply
• underpayments or overpayments may accumulate
• employees feel mistakes more acutely

Payroll teams need strong controls to avoid large monthly errors. When combined with Payday Super, a single incorrect payroll can mean a significant super underpayment that is immediately visible to the ATO.

✘ Operational Timing Constraints

If timesheets, rostering, or labour costs change rapidly (for example, in hospitality, healthcare or retail), a monthly cycle may be operationally cumbersome.

Shorter pay cycles can make it easier to:

• reflect frequent roster changes
• handle variable overtime and allowances
• manage high turnover or seasonal staffing

In these environments, weekly or fortnightly payroll may still be more practical despite the extra administration.

3. Award and EBA Constraints: What Employers Must Check

Before making any decisions about monthly payroll, confirm:

• Does the relevant award specify a pay frequency?
• Does the EBA or employment contract mandate weekly or fortnightly pay?
• Are there industry rules (for example, construction, transport) that restrict monthly cycles?
• Do penalty rates or allowances rely on shorter cycles?

Where interpretations are unclear, legal or HR advice may be required. Payroll frequency sits at the intersection of compliance, operational reality and employee expectations, so it is important to get this step right.

4. Employee Communication and Change Management

If shifting to monthly payroll is permitted and appropriate, communication is crucial. Effective communication should include:

✔ Advance notice – provide at least one or two pay cycles notice.

✔ Budgeting support – tools, webinars or simple financial guidance can prevent stress.

✔ Clarity on cut-off dates – timesheets and approvals may need new deadlines.

✔ Transparent explanations – employees should understand why the business is moving (for example, compliance, simplicity, efficiency).

✔ Channels for questions – HR inboxes, Q&A sessions and one-on-one support may be needed initially.

Handled well, a move to monthly payroll can be accepted and even welcomed. Managed poorly, it can damage trust and engagement.

5. Structural Benefits Under Payday Super

Under Payday Super, monthly payroll can materially reduce:

• compliance risk
• administrative load
• reconciliation volume
• cash flow volatility
• clearing house pressure
• super payment errors

Because super is paid on payday, fewer paydays mean fewer possible points of failure. For many employers, monthly payroll is one of the most practical structural adjustments to accommodate Payday Super, alongside improvements to payroll systems, processes and governance. 

6. Real-World Examples: When Monthly Payroll Makes Sense

Case Study 1: Professional Services Firm (40 staff)

• Monthly billing cycle
• Stable workforce
• Minimal overtime/allowances

Result: Monthly payroll improved cash flow alignment and reduced payroll processing time by around 60 per cent. Payday Super obligations became easier to manage with fewer super payment dates.

Case Study 2: Tech Startup (20 staff)

• Already using monthly payroll
• Salaried employees with predictable hours

Result: The Payday Super transition had little operational impact. The existing monthly payroll structure proved ideal for continuous super requirements.

Case Study 3: Aged Care Provider (120 staff)

• High shift variability
• Award constraints
• Weekly rostering
• Employee preference for frequent pay

Result: Monthly payroll was not viable due to award rules, operational realities and workforce expectations. The provider focused instead on strengthening payroll compliance, cash flow planning and payroll process and systems within a weekly/fortnightly framework.

Bringing It All Together: Should You Switch To Monthly Payroll?

There is no one size fits all answer. Whether you should move to monthly payroll under Payday Super depends on:

• your award and EA obligations
• workforce expectations and financial wellbeing
• cash flow cycles and funding arrangements
• operational structure and roster patterns
• payroll system capability and integration

Under Payday Super, monthly payroll offers significant benefits – but only if it aligns with your legal, operational and cultural environment. In some businesses, a strengthened weekly or fortnightly process will be a better answer than a frequency change.

Need Guidance On Payroll Frequency Under Payday Super?

If you are unsure whether monthly payroll is right for your organisation, we can help you:

• Assess award, EBA and contractual constraints
• Analyse cash flow and revenue cycles against different pay frequencies
• Review payroll systems, integrations and controls
• Model the operational impact of moving to monthly payroll versus staying as you are

Book a meeting now about whether a change in pay frequency could streamline your operations under Payday Super, or start with our pillar guide: What Is Payday Super And What Do Employers Need To Think About Now?  and our articles on cash flow planning and payroll compliance to see the bigger picture.

Remember to register for our webinar: Payday Super Changes: What Employers Need to Know Before July 2026  on Thursday 29 January at 1.00pm (AEST).

With Payday Super requiring employers to pay superannuation at the same time as wages, payroll compliance is about to come under much sharper scrutiny. The ATO will receive more frequent and more accurate data through Single Touch Payroll (STP), meaning errors that previously went unnoticed until quarter-end will now surface much sooner.

We recently ran a webinar covering the key changes and the playback is available: Payday Super Changes: What Employers Need to Know Before July 2026.

If you are still getting up to speed on what Payday Super is and when it starts, read our guide: “What Is Payday Super And What Do Employers Need To Think About Now?” first, then come back to this article for a deeper dive into payroll compliance risks. 

For employers, this means your payroll compliance processes, classifications and controls need to be more robust than ever.

Here are the top 10 compliance risks no employer can afford to ignore.

1. Employee Classification Errors

Misclassifying workers (for example, casuals vs part timers, contractors vs employees) can cause:

• missed super payments
• incorrect super rates
• exposure to Super Guarantee Charge (SGC)
• backpay liabilities

Payday Super shortens the correction window significantly, so errors must be fixed immediately. Getting employee classifications right is a core part of payroll compliance under the new regime.

2. Superable vs Non-Superable Payments

Some allowances and payments attract super; others do not. Common problem areas include:

• overtime vs ordinary hours
• travel allowances
• meal allowances
• leave loading
• bonuses and commissions

With super due on payday, any misinterpretation of superable payments will lead to instant underpayments and immediate payroll compliance issues, rather than something you can tidy up at quarter-end.

3. Contractor Risk

The ATO’s definition of an “employee for SG purposes” is broad. Contractors may attract super even if:

• they have an ABN
• they submit invoices
• they call themselves “contractors”

This is one of the most common sources of SG non compliance and will be even riskier under Payday Super. Reviewing contractor arrangements now is essential to keep payroll compliance intact once the new rules begin.

4. Incorrect Timing = SGC Exposure

Under Payday Super:

• late super means automatic SGC exposure
• SGC is not tax deductible
• interest and administration fees apply
• disclosures may be required

The reduced time window means payroll teams cannot rely on quarter-end corrections anymore. Timing becomes a key element of payroll compliance, and late payments will also create knock on cash flow pressure.

We explore the impact of Payday Super on cash flow in our blog: “Cash Flow Planning for Payday Super: How to Avoid Surprises”.

5. Reliance on Manual Calculations

Manual handling of:

• super calculations
• adjustments
• backpay
• termination payments

…will create major compliance risks.

Every payroll cycle must be accurate because you cannot fix super after the fact without triggering late payment penalties and SGC.

Automating calculations and building clear review checkpoints into each pay run is fundamental to strong payroll compliance under Payday Super.

6. Payroll System Configuration

Many payroll systems will require updates for:

• real-time SG calculation
• instant super export files or direct clearing house integration
• STP Phase 2 mapping
• award and enterprise agreement changes

Incorrect configuration will automatically flow into super errors, even if staff are doing everything else correctly. Take a read of our blog about Payday Super And Payroll Processes: The Changes You Need To Plan For.

Before Payday Super starts, employers should work with their software providers or advisers to validate that system settings are correct and tested.

7. Cleansing Allowance and Pay Code Structures

Incorrect pay codes are one of the most frequent causes of super mismatches and payroll compliance failures.

Before Payday Super starts, employers should review:

• all pay items
• super flags
• overtime rules
• broken shift allowances
• cash-out of leave

Fixing pay codes and allowance logic payroll processes now prevents repeated SG underpayments once Payday Super is live.

8. Onboarding and Offboarding Processes

Missed or late super often comes from poor data capture and weak processes when people join or leave the business, such as:

• start dates
• termination dates
• fund details
• TFNs
• eligibility rules

Under Payday Super, late onboarding or overlooked changes can mean instant late super and payroll compliance breaches. Strengthening onboarding and offboarding checklists, and making sure payroll receives complete, timely information, is critical.

9. Contractor and Labour Hire Arrangements

Labour hire and contractor structures often contain hidden SG risks. Common red flags include:

• sham contracting
• labour-hire misinterpretations
• contractors paid mainly for labour
• high-risk industries (cleaning, IT, construction, logistics)

ATO scrutiny in this area is already high and Payday Super will amplify it, as patterns of underpayment become easier to spot in near real time. A review of contractor and labour hire arrangements should be part of any Payday Super payroll compliance project.

10. Internal Controls and Payroll Reconciliation

Quarterly super reconciliations will no longer be enough. Employers must introduce:

• per-pay-run payroll-to-super reconciliations
• automated variance reports
• exception reporting
• funding reviews for every payroll cycle

These controls are now essential to avoid SGC liabilities and to demonstrate sound payroll compliance if the ATO reviews your business.

For many organisations, this will also involve tightening broader processes, systems and governance around payroll. 

Bringing It All Together: Payroll Compliance In A Payday Super World

Payday Super changes the payroll compliance landscape. Errors that may have gone unnoticed for months will now be detected quickly through STP and super payment data.

Employers who strengthen payroll governance now will:

• minimise the risk of SGC and penalties
• reduce the time and cost of fixing historical issues
• improve data quality and reporting
• protect themselves from ATO action once Payday Super begins

Robust payroll compliance is no longer a nice to have, it is essential to operating safely under the new rules.

Need Help With Payroll Compliance Before Payday Super Starts?

If you would like to understand your payroll compliance risks before Payday Super shines a spotlight on them, we can help you:

• Review employee and contractor classifications
• Assess payroll system configuration and pay code structures
• Test super calculations, timing and reconciliations across recent pay runs
• Strengthen controls, processes and governance around payroll and super

Remember to register for our webinar: Payday Super Changes: What Employers Need to Know Before July 2026  on Thursday 29 January at 1.00pm (AEST).

Book a Payroll Health Check and we will identify compliance risks before Payday Super catches them. 

For a broader view of the change, start with our pillar guide: “What Is Payday Super And What Do Employers Need To Think About Now?” and explore our related articles on cash flow, payroll frequency and payroll processes and system changes. 

With the introduction of Payday Super, employers will soon need to pay employees’ superannuation at the same time as their wages – rather than quarterly. While this change improves transparency and protects employees, it also creates a new set of challenges for business cash flow planning and management.

For many organisations, the shift from four super payments a year to ongoing, frequent outflows requires a complete rethink of how cash is forecast, managed and allocated. Proactive cash flow planning for Payday Super will be essential to avoid nasty surprises.

If you are still getting up to speed on what Payday Super is and when it starts, read our guide What Is Payday Super And What Do Employers Need To Think About Now?  first, then come back to this article for a deeper dive into the cash flow impact.

We recently ran a webinar covering the key changes and the playback is available: Payday Super Changes: What Employers Need to Know Before July 2026.

This guide explains how Payday Super affects cash flow, the key risks to watch and practical steps you can take now to protect your working capital.

Here’s how to get ahead of the change.

From Quarterly to Continuous: How Payday Super Changes Your Cash Flow Picture

Under the current system, employers often treat superannuation as a large but infrequent payment – paid up to 28 days after the end of each quarter. Many employers accrue super amounts in their accounts and pay them in a single lump sum after quarter end. In effect, super has acted as a short term source of funding inside the business.

Payday Super changes this dramatically:

• Quarterly payments → Weekly/fortnightly/monthly outflows
• 28-day buffer → Payment due on or close to payday
• Batch processing → Real-time payroll integration

For businesses with tight or seasonal cashflow, this shift reduces flexibility and increases the need for accurate cash flow planning and forecasting. Without proper planning, you may find yourself short of cash at critical times, such as BAS lodgements, rent, loan repayments or payroll.

Step 1: Model the Impact: What Different Pay Cycles Look Like

The foundation of effective cash flow planning for Payday Super is understanding what super outflows will look like under your current payroll schedule. Here are simplified illustrations.

Weekly Payroll Example

• Weekly wages: $50,000
• Super guarantee (12%): $6,000
• New super outflow: $6,000 every week

Annual impact:

• Old system: Four payments of ~$78,000
• New system: 52 payments of $6,000
• Cash leaves the business 8–10 weeks earlier than it currently does.

Fortnightly Payroll Example

• Fortnightly wages: $100,000
• SG: $12,000
• Outflow every second week: $12,000

Annual impact:

• Old system: 4 large payments ~ $78,000
• New system: 26 smaller payments of $12,000
• Cashflow timing tightens significantly.

Monthly Payroll Example

• Monthly wages: $200,000
• SG: $24,000
• Outflow: $24,000 monthly, similar timing but earlier compared to quarterly payments.

Annual impact:

• Old system: Four quarterly payments of approximately $78,000
• New system: Twelve monthly payments of $24,000

The total super paid over the year is unchanged, but cash leaves the business earlier and more frequently than under quarterly payments, which needs to be factored into cash flow planning.

Step 2: Explore Cash Smoothing Strategies to Reduce Pressure

To avoid sudden strain on liquidity, businesses should consider implementing cash flow smoothing methods such as:

✔ Establishing a dedicated superannuation holding account

Move SG amounts into this account each pay run. This stabilises cash flow and avoids the risk of underfunding when payments fall due.

✔ Increasing payroll frequency reserves

Maintain a reserve fund that covers one to two full pay cycles, including wages and super.

✔ Aligning invoice cycles with payroll cycles

Where possible, bring forward billing or shorten payment terms so cash inflows better match your payroll schedule.

✔ Introducing rolling cashflow forecasts

Shift from quarterly or high-level monthly forecasting to weekly cash flow projections so you can see pressure points early and act in time.

✔ Automating payroll and super payments

Automation reduces delays, errors, and compliance risk, keeping cashflow predictable.

Read our blog on: Payroll Compliance Under Payday Super: 10 Things Employers Can’t Ignore for a more in-depth look at the key ATO obligations, common risk areas and how to tighten your payroll controls.

Step 3: Review Payroll Frequency and Timing

Some employers may find that their current pay cycle becomes inefficient under Payday Super. You might consider a change if:

• You pay weekly and cashflow becomes too tight: Switching to fortnightly or monthly can reduce administrative load and smooth cash obligations.

• Your payroll system struggles with high frequency super processing: A longer cycle (for example, fortnightly instead of weekly) can reduce pressure on systems and teams.

• Your revenue cycle does not align with payroll: If major inflows occur monthly, matching payroll frequency may stabilise your cash pattern.

• Your industry has seasonal or fluctuating workforce levels: Flexible pay cycles can help stabilise outflows during peak staff periods.

Before changing pay cycles, consider:

• employee agreements
• award obligations
• HR and operational impacts
• payroll system capabilities

Read our in-depth blog: Payday Super and Payroll Frequency: Should You Move To Monthly Pay? for a deeper look at the pros and cons of moving to monthly payroll.

Bringing It All Together: Cash Flow Planning for Payday Super

Payday Super represents a major structural shift for business cash flow. Preparing early – by modelling payroll scenarios, adjusting forecasts and evaluating process changes – can prevent unnecessary surprises.

With the right strategies and genuine cash flow planning for Payday Super, you can integrate the new rules smoothly and without disruption.

Need Help Modelling The Cash Flow Impact Of Payday Super?

If you would like support to understand what Payday Super will mean for your cash flow, we can help you:

• Build practical cash flow forecasts that reflect more frequent super payments
• Test different payroll and payment timing scenarios
• Identify working capital and finance strategies to support the transition
• Coordinate your cash flow plan with broader Payday Super readiness work

If you are reading this before our webinar date, remember to register for Payday Super Changes: What Employers Need to Know Before July 2026  on Thursday 29 January at 1.00pm (AEST).

Reach out to us to book a Payday Super cash flow review, or start by reading our pillar guide What Is Payday Super And What Do Employers Need To Think About Now?  for a full overview of the changes.

The introduction of Payday Super is one of the most significant changes to Australia’s superannuation system in recent years. From 1 July 2026, employers will be required to pay super at the same time as salary and wages, rather than quarterly.

While on the surface it may appear to be a simple timing adjustment, in reality Payday Super has far-reaching implications for how payroll, finance, HR and governance teams operate. It affects cash flow, systems, compliance and even the frequency with which you pay staff.

We recently ran a webinar covering the key changes and the playback is available: Payday Super Changes: What Employers Need to Know Before July 2026.

This guide explains what Payday Super is, how it will impact your business and the practical steps you should take now. It also links out to more detailed articles in each key impact area so you can dive deeper where you need to.

What Is Payday Super?

Payday Super is a change to the Superannuation Guarantee (SG) rules that will require employers to pay their employees super contributions at the same time as each pay cycle, rather than making contributions quarterly.

This means:

• If you pay employees weekly, super must be paid weekly.
• If you pay fortnightly, super must be paid fortnightly.
• If you pay monthly, super must be paid monthly.

Super contributions will also need to reach the employee’s super fund within a short, legislated timeframe, currently set at within seven business days of each payday.

The aim of Payday Super is to:

• Reduce unpaid and late super.
• Improve employees’ retirement outcomes by getting money into their funds sooner.
• Increase transparency and give the ATO faster, more accurate data.

When Was Payday Super Legislation Introduced?

Payday Superannuation was first announced by the Australian Government on 2 May 2023 as part of the 2023–24 Federal Budget.

Following consultation and exposure draft legislation in 2025, the Treasury Laws Amendment (Payday Superannuation) Bill 2025 passed both Houses of Parliament and received Royal Assent in early November 2025.

When Does Payday Super Start and Who Does It Affect?

The new super rules commence on 1 July 2026. From that date, employers will need to pay Superannuation Guarantee (SG) contributions in line with each pay cycle and ensure those contributions are received by employees’ super funds within seven business days of each payment.

Payday Super applies to all employers who are required to pay SG contributions, covering eligible full time, part time and casual employees across all industries. This includes microbusinesses, small and medium businesses right through to large corporations.

Payday Super Changes: Why This Is a Bigger Shift Than Most Employers Realise

On the surface, Payday Super sounds like a timing change. In reality it restructures how payroll and finance teams must operate and will change the way your payroll cycle, cash flow and compliance processes work together.

1. Significantly reduced processing window

Under the current rules, employers have up to 28 days after the end of each quarter to pay superannuation contributions. With the new super rules, that window shrinks dramatically: payment must occur on or very close to payday. Super needs to be received by the employees’ superfund within 7 business days, leaving little room for:

• corrections to pay, allowances or loading
• late timesheets and last-minute roster changes
• cash flow delays or approval bottlenecks
• manual processing issues

What used to be a quarterly clean-up becomes a per-pay-run discipline.

2. Payroll systems must calculate and transmit data instantly

Not all payroll platforms are currently capable of real-time super calculations or instant SuperStream-compliant reporting. Many businesses will need to:

• Upgrade or replace payroll software.
• Reconfigure existing systems to support the new super rules.
• Put in place new integrations with super clearing houses and accounting systems.

If your current setup relies on manual uploads or batch processing, there is a high chance it will not cope well with the new superannuation rules without changes.

3. Cash flow impact

Quarterly payments allowed businesses to hold on to super amounts for weeks or months before paying them out. This will no longer be the case. Super is no longer something businesses can “catch up on” at quarter-end. Payday Super will particularly affect:

• Businesses with tight or seasonal cash flow
• Employers who rely on quarterly cycles to smooth expenses
• industries with variable rosters or fluctuating labour costs

Under the new superannuation rules, the money leaves your account every pay cycle, so cash flow forecasting and liquidity management become far more critical.

4. Greater compliance visibility and enforcement

With enhanced Single Touch Payroll (STP) reporting and more frequent SG data, the ATO will have far better visibility of:

• Late or missed super payments.
• Underpayments and calculation errors.
• Patterns of non-compliance.

Issues that might previously have gone unnoticed for months could be flagged quickly. This new level of scrutiny means processes that were “good enough” under quarterly super may no longer meet compliance standards.

Women-led businesses have the opportunity to receive up to $5,000 in funding to support business growth through training, essential equipment, and professional services.

Grant Applications Dates

Apply now from 1st September 2025 and closing at 4:00pm AEST on Tuesday, 7 October 2025. A total fund of $250,000 is available for this Lord Mayor Grant, with up to $5,000 (exclusive of GST) available per successful application. A limit of one application per business will be accepted.

Entry Guidelines

The Lord Mayor’s Women in Business Grant 2026 will provide funding to support women owned businesses to grow and develop their business.
The grant will provide an opportunity for eligible organisations to apply for funding of up to $5,000 (exclusive of GST) to build their business capability or gain professional services that will boost local economic impact.

To be eligible for this grant, you/your business must:

• Have an active Australian Business Number (ABN) and be registered in Queensland
• Be Headquartered/have business outlets based in the Brisbane Local Government Area (LGA) and be able to provide rates notice/utility bill/proof of location)
• Be an Australian Resident/Citizen
• Be a woman in business with a minimum of 50% ownership of the business.
• Be 18 years of age (proof of ID) at time of application
• Be operating/trading for the full financial year of 2024/25 and demonstrate more than one client
• Not be insolvent or have owners/directors that are bankrupt
• Have an annual turnover between $75,000 and $500,000.
• Provide one application per business for up to $5000 (exclusive of GST and delivery fees). This is non-matched funding.
• Provide original quotes from local Brisbane/QLD businesses where quotes proposed as part of the Grant. Supplier invoices can include GST
• Have the Approved Use commencing after the grant is received
• Expend the funding and have an outcome delivered for acquittal by 30 June 2026.
• Not be a previous recipient of the Lord Mayor’s Women in Business Grant.
• Complete grant related surveys provided periodically by BEDA, which may extend beyond the term of the Grant.
• Participate in the 12-month business support program developed for Lord Mayor’s Women in Business Grant recipients.

What Can Be Funded?

The grant will support women to build their personal capability as a business owner, enabling their business to grow and build a sustainable, strong, local small business economy. Grants will support procurement of professional services, training and education and operationally critical business equipment.

Examples of what can be funded:

• Procurement of professional services for:
  • Development of business strategy
  • Marketing and brand services
  • Ecommerce services
  • Financial services
  • Compliance and industry regulations relevant to business.
• Training and Education:
  • Certification by an
  • RTO/TAFE
  • Professional development on leadership/business strategy
  • Financial literacy
  • Digital marketing
  • Expert training relevant to your business
  • Cost of running or attending a convention, expo or business learning event.
• Business equipment:
  • Equipment that demonstrates tangible growth for your business, tool or Product that is key in delivering your business outcomes. E.g. Sewing machine for a fashion business, labelling machine for packaging, camera for photographer, etc.

All applicants will be automatically signed up to the Brisbane Business Hub community and provided with networking, education and training upskill opportunities.

For more information on the assessment criteria and application process visit the Brisbane Business Hub for further details.

Please contact the team at MGI if you have any questions or need assistance in your application.