On 9 October 2025, the Treasury Laws Amendment (Payday Superannuation) Bill 2025 and the Superannuation Guarantee Charge Amendment Bill 2025 (collectively hereafter referred to as “the Bills”) were introduced to Parliament.

These Bills have since passed both Houses and received Royal Assent on 6 November 2025.Next Step for Payday Super: Legislation Introduced and Passed

Under the new system, employers will be required to deposit super contributions at the same time as salary and wages — a reform set to begin on 1 July 2026.

These changes aim to reduce unpaid super, particularly among lower-paid, casual, and insecure workers. According to recent ATO data, roughly $5.2 billion in super was unpaid in the last financial year. For a 35-year-old in a typical unpaid super case, the Government estimates the reform could result in more than $30,000 extra in retirement savings.

Key Features of the New Legislation

The recently passed Treasury Laws Amendment (Payday Superannuation) Bill 2025 brings several important changes.

• Employers must ensure super contributions arrive in the employee’s super fund within 7 business days of each payday.
• This “qualifying earnings” (QE) concept includes ordinary time earnings, salary sacrifice contributions, and other relevant amounts.
• The super guarantee charge (SGC) will be updated, and additional penalties will apply if employers miss their obligations.
• The Small Business Superannuation Clearing House (SBSCH) will be shut down from 1 July 2026, and it will no longer accept new users after 1 October 2025.

ATO’s First-Year Compliance Approach

To help employers adjust, the ATO has published a draft Practical Compliance Guideline (PCG 2025/D5), which applies for the first year of “payday super” (1 July 2026 – 30 June 2027).

Employers will be placed into three risk zones depending on how well they comply:

• Low risk: Employers who make timely contributions and fix any mistakes quickly may not face ATO review.
• Medium risk: For those transitioning to the new rules but with some late payments or timing misalignments.
• High risk: Those with outstanding super shortfalls may be heavily prioritised by the ATO for investigation.

Public consultation on the draft guideline is open — comments are being accepted.

Why These Reforms Matter

• They address billions of dollars in unpaid super, which disproportionately affects vulnerable workers.
• By making super payments more frequent, employees benefit from earlier compounding, helping build larger retirement balances.
• The ATO’s enforcement framework is being redesigned to better target non-compliant employers.

What Employers Should Do Now

If you run a business, now’s the time to act:

1. Review payroll systems to ensure they can handle super payments aligned with pay cycles.
2. Assess cash flow impacts, since more frequent super payments may affect liquidity.
3. Plan for the SBSCH closure, especially if you’re a small employer.
4. Stay updated on ATO guidance — the compliance framework may be finalised before July 2026.

Conclusion

With the passage of the payday super legislation, Australia is moving toward a fairer super system. These reforms aim to close the superannuation gap, especially for lower-paid and casual workers, by requiring employers to pay super on payday. The ATO’s risk-based compliance plan gives businesses a runway to adjust, but proactive preparation is essential. Employers should start planning now to ensure a smooth transition by the July 2026 start date.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Several significant developments are causing considerable attention in the world of superannuation, and 2025 promises to be a year of potential changes. Let’s take a closer look at some of the key issues to be aware of.

$3 Million Superannuation Cap – Division 296

One of the major items on the horizon is the proposed Division 296, which introduces a “$3 million super cap.” Fortunately, the proposal was not passed by the Senate in the final sitting of 2024. Senate sittings are set to resume in February 2025, but with a federal election required before May 17, 2025, we are left awaiting news on when the election will be called and whether there will be time for Division 296 to be debated further.

It is important to note that any Bills not voted into law before an election are rendered void. Therefore, the early months of 2025 will be crucial in determining the future of this contentious issue.

What is Division 296?

If Division 296 is introduced, it would impose an additional 15% tax on earnings (including both realised and unrealised gains) on superannuation balances exceeding $3 million, effective from July 1, 2025. This change could significantly impact high-balance superannuation accounts, and if the proposal becomes law, trustees will need to act swiftly. Staying informed and flexible in strategy is essential as these changes could become law with little warning.

Non-Arm’s Length Expenditure (NALE)

At the end of the 2024 financial year, the Federal Government passed the long-awaited Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. This legislation includes significant updates to non-arm’s length expense provisions (Schedule 7), reminding SMSF trustees of the importance of ensuring that all fund transactions are conducted at arm’s length.

What many trustees might not realize is that expenses within the fund are also considered when determining whether the fund’s income is taxable as non-arm’s length income. This means the requirement to transact at arm’s length applies not just to income but also to expenses. Non-compliance could result in significant tax penalties, including a 45% tax rate on fund income.

Objective of Superannuation

In 2024, the Superannuation (Objective) Bill 2023 was passed, establishing a clear objective for the superannuation system: “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.” This legislation ensures that superannuation is primarily aimed at providing for retirement.

While previous Liberal Governments had discussed the concept of a superannuation objective, it wasn’t until the current Labor government legislated it that the objective was officially codified. Going forward, Parliament will need to consider this objective when contemplating any changes to the superannuation system.

Superannuation Guarantee Contributions

Another significant change is the increase in the Superannuation Guarantee (SG) contribution rate, which will rise from 11.5% to 12% of an employee’s ordinary time earnings starting on July 1, 2025. While this increase benefits employees, it will place additional pressure on employers.

Here’s a quick overview of the SG contribution rates from 2002 to 2026:

Super Guarantee Period	Rate
July 1, 2002 – June 30, 2013	9.00%
July 1, 2013 – June 30, 2014	9.25%
July 1, 2014 – June 30, 2021	9.50%
July 1, 2021 – June 30, 2022	10.00%
July 1, 2022 – June 30, 2023	10.50%
July 1, 2023 – June 30, 2024	11.00%
July 1, 2024 – June 30, 2025	11.50%
July 1, 2025 – June 30, 2026 and onwards	12.00%

Employers who fail to meet the required SG contribution rates may incur a Superannuation Guarantee Charge (SGC) from the ATO, which includes the unpaid SG amounts, interest, and administrative fees.

Tax Offset for Contributions on Behalf of Your Spouse

If you make a super contribution on behalf of your spouse, you may be eligible for a tax offset of up to $540 per year. To qualify, the contribution must be made to a complying super fund, and your spouse’s income must be below $40,000.

Eligibility requirements for the tax offset include:

• The contribution must not be deductible by you.
• Both you and your spouse must be Australian residents at the time of the contribution.
• Your spouse’s income must be below the specified threshold.
• The total super balance of your spouse must be under the $1.9 million cap (for FY2025).
• Your spouse must be under 75 years old.

The tax offset decreases as your spouse’s income exceeds $37,000, and it phases out completely when their income reaches $40,000.

Superannuation and Retirement Preparedness

New research from the Association of Superannuation Funds of Australia (ASFA) has revealed that only 30% of Australians can afford a “comfortable” retirement as defined by ASFA’s Comfortable Retirement Standard. For couples aged 65-84 who own their own home, the required super balance is at least $690,000, while singles need $595,000. This equates to $73,337 annually for couples and $52,085 annually for singles.

The report also highlights the considerable gap in knowledge and preparedness among individuals nearing retirement, emphasizing the importance of seeking expert financial advice to ensure sufficient retirement funds.

Supporting Your Retirement Planning

As retirement approaches, it’s crucial to ensure your superannuation is optimised to support your goals. Our advisers can assist with:

• Optimising Retirement Outcomes: By assessing your current superannuation balance, predicting future needs, and developing a tailored strategy, we can help you reach your retirement goals, considering factors like inflation and individual objectives.
• Investment Returns and Managing Risk: Superannuation investments are subject to market volatility, and managing this risk is critical. Our financial advisers can recommend diversified portfolios to help you navigate these uncertainties.
• Tax Efficiency: It is vital to manage taxes both during the accumulation phase and retirement phase. We offer strategies like transition-to-retirement income streams or concessional contributions to help reduce tax liabilities.
• High-Balance Accounts and Tax Implications: If you have a super balance exceeding $3 million, the proposed Division 296 taxes could impact you. Our advisers can assist in implementing tax planning strategies to mitigate the effects of these changes.
• Superannuation Gender Gap: Women often face unique challenges in building their super balances, such as time out of the workforce for caregiving. Our financial advisers can help women catch up by recommending strategies like salary sacrificing and leveraging government incentives.

Conclusion

In 2025, the superannuation landscape is set to evolve, with potential changes on the horizon. Whether you are preparing for retirement, managing your superannuation investments, or considering how to address new tax implications, it’s crucial to stay informed and seek professional advice to navigate these developments effectively.

—————BOOK YOUR EXCLUSIVE 15 MINUTE ZOOM CONSULTATION————-

We offer a 15-minute no obligation consultation to existing property investors, first home buyers and small business owners who are looking at property investments, business and asset protection. To Book an Appointment simply click here and pick a time and date.

BOOK YOUR ZOOM APPOINTMENT HERE

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Small business owners often find themselves navigating the complex landscape of employing contractors versus hiring employees. With the rise of the gig economy, the allure of contracting—where businesses might avoid responsibilities like superannuation, holiday pay, and sick leave—can be tempting. However, it’s crucial to clearly define the nature of the working relationship and understand your obligations to avoid costly penalties.

Determining Employee or Contractor Status

It is essential for small businesses to ascertain whether a worker qualifies as an employee or an independent contractor. This distinction impacts tax obligations, superannuation, and other responsibilities, according to an ATO spokesperson. The ATO provides a guide to help differentiate between the two, debunking common myths that often lead to mistakes by small businesses.

A key consideration in this classification involves assessing the level of control a business exerts over the worker. This includes determining who directs how, when, and where the work is performed. The totality of the relationship—beyond just the contract terms—needs to be examined, especially in light of recent amendments to the Fair Work Act 2009 aimed at closing loopholes.

Contracts alone do not dictate the nature of the relationship or the employer’s obligations. Practical scenarios might reveal that a worker performing tasks typically associated with an employee could indeed be classified as such.

Eight Key Questions to Classify Workers Correctly

Proper classification of workers is vital for your business model. For instance, Uber relies on independent contractors to operate. Here are eight questions to help determine if a worker should be classified as an employee or contractor:

1. Is the Work Integral to Your Business? If the role is crucial to your operations, the worker is more likely to be classified as an employee.
2. Impact on Profits If the worker’s role significantly affects your company’s profits, they are likely an employee.
3. Investment Comparison Independent contractors typically work on specific projects and may not impact your company’s long-term future like an employee would.
4. Specialized Skill Set If the worker offers specialized or unique skills, they may be an independent contractor. Conversely, if their skills are easily replaceable, they may be an employee.
5. Degree of Control A worker who sets their own hours, chooses their work location, and determines the specifics of their job is more likely an independent contractor.
6. Progress Reporting Independent contractors usually provide regular updates and invoices, whereas employees may not.
7. Self-Employment Deductions Independent contractors handle their own self-employment taxes, unlike employees.
8. Multiple Clients Independent contractors typically work with multiple clients, whereas employees usually work for just one company.

If you’re unsure about your classification, consulting with a lawyer, accountant, or your tax office for further clarification is advisable.

Assessing Your Business Needs

While many business owners aim to minimize costs by hiring contractors, some situations necessitate having employees. Assessing your specific needs will help determine the best approach.

Verifying Contractor Compliance

Before hiring a contractor or subcontractor, ensure they are compliant with employment regulations, including payment of worker’s compensation, payroll tax, insurance, and licenses. Adhering to minimum pay rates and National Employment Standards can help mitigate risks.

Businesses in certain industries, such as building and construction, cleaning, courier services, IT, security, and surveillance, may need to report payments to the ATO via the Taxable Payments Annual Report (TPAR), due by August 28 each year.

Contractors, whether operating as sole traders or through a company, partnership, or trust, must have an ABN and possibly other business tax registrations like GST. Typically, they handle their own tax and superannuation responsibilities, as well as sick leave and holiday pay.

Payroll Tax and Superannuation

Payroll tax laws vary by state and territory but generally apply to payments made to contractors under specific contracts. Similarly, while many SMEs believe they do not owe superannuation for contractors, this assumption may be incorrect. The ATO indicates that superannuation might be required for contractors classified as employees for superannuation purposes.

Understanding and correctly applying these rules is crucial to avoid potential legal and financial repercussions.

—————BOOK YOUR EXCLUSIVE 15 MINUTE ZOOM CONSULTATION————-

We offer a 15-minute no obligation consultation to existing property investors, first home buyers and small business owners who are looking at property investments, business and asset protection. To Book an Appointment simply click here and pick a time and date.

BOOK YOUR ZOOM APPOINTMENT HERE

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

---

General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.