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