1 July 2026 saw a major change in superannuation for all Australian businesses. The requirement to pay super quarterly was changed, and it is now mandatory for all businesses to pay their super at the same time as they pay their wages.

This has now been in place for almost two months, so now would be a great time for businesses to reflect on their processes to make sure they are remaining compliant with the new legislation.

Qualifying Earnings

One of the updates to superannuation legislation was renaming the earnings that are superable to “Qualifying Earnings”. 

Qualifying Earnings are the types of payments made to employees that are used to calculate superannuation guarantee payments and include:

• Ordinary times earnings (including leave, allowances, bonuses and lump sum payments)
• All commissions
• Salary sacrifice amounts
• Earnings paid to workers who fall under the expanded definition of an employee, including payments to independent contractors paid mainly for their labour

One way for businesses to ensure they are paying the right amounts at the right time is to become familiar with reports their software can produce and perform regular reconciliations of their wages.

Monthly wages reconciliations 

A very useful process for businesses to adopt is to perform a monthly reconciliation for their wages. This can help to identify potential problems before they become actual problems.

There are two reports that businesses should review every month after the bank account has been reconciled:

• Payroll Employee Summary
• This report summarises all employees’ wages (gross, net and tax payable) and superannuation.
• A quick calculation will indicate if the super is 12% of the gross amount - if it is not, further investigation should be conducted to determine why. We note that overtime is not superable – so this could be a reason for variation.
  

• General Ledger/Account Transactions Report 
• This report shows all transactions in each different account/category.
• The report can be customised to show only the accounts that need to be reviewed and for any determined period of time.
• Reviewing this report will help to identify any transactions that have been miscoded. 
• The superannuation payable account should always show the amounts from the payroll each pay cycle, and then the amounts paid out from the bank. The debits and credits in this report should always balance each other out. If the balance of this account does not revert back to nil each pay cycle, that could indicate a problem.
• The wages payable should also revert back to nil after each pay run. One side will be the transactions from the pay run, and the other will be the bank transaction paying the employees' wages. 

Why it is important to reconcile wages regularly 

The Australian Tax Office has made it very clear that they will begin fining employers who do not pay their superannuation on time, or who underpay super. They have stipulated that while they understand errors can occur, they will not excuse negligence when it comes to superannuation obligations.

Single Touch Payroll reports to the ATO each pay cycle, meaning that the ATO is aware of how much super should be paid and when, and they are cross-matching information provided by employers and super funds to ensure that obligations are being met.

Single Touch Payroll finalisations have replaced Payment Summaries and Group Certificates, and these need to be completed by 14 July each year for the year ended 30 June. This is quite a small window of time if a business needs to reconcile their wages for the full year. By reconciling monthly, a business can be confident that they have met all their obligations throughout the year and have reported their wages and superannuation accurately. The finalisation can then be completed in a timely manner, ensuring that the business is compliant with ATO legislation and avoiding any fines/penalties that apply for late lodgement.

Returned Superannuation Payments

If an employee changes their super fund and fails to let their employer know, the superannuation contribution to the old account will be returned to the employer. When this is returned, it should be actioned immediately by the employer – the new fund should be obtained from the employee and the contribution re-sent to the correct fund. If this is overlooked, reconciling the super accounts should highlight this anomaly.

Action Plan