From 1 July 2026, the way Australian employers pay superannuation is changing — and a lot of small business owners are not ready. The Payday Super reform requires super to be paid at the same time as wages, every pay cycle, instead of the current quarterly system. For businesses that pay staff weekly or fortnightly, that means up to 26 super payments a year instead of four.
Employment Hero's own survey data shows 58% of business owners have never heard of Payday Super. If you are in that group, now is a good time to act — because some payroll tools handle the change automatically and some leave you to figure it out yourself.
What Is Changing on 1 July 2026
Under the current system, employers must pay super at least quarterly. Under Payday Super, the obligation moves to each pay cycle. If you pay staff fortnightly, you pay super fortnightly. If you pay weekly, super goes weekly too. Late or missed payments will attract the Super Guarantee Charge, which includes interest and an administration fee on top of the missed amount.
The ATO will match super fund records against your STP Phase 2 data in real time, so underpayments will be visible immediately rather than surfacing at year end. There is no hiding behind quarterly batches anymore — each pay run creates a super obligation that the ATO can check against fund receipts.
The SBSCH Is Closing: What That Means for Your Business
The Small Business Superannuation Clearing House — the free ATO tool used by many small employers to batch their quarterly super payments — closes on 1 July 2026. If you currently use the SBSCH, you will need a replacement before that date.
The SBSCH was designed for quarterly payments. It cannot handle the per-payday frequency that the new rules require. Businesses relying on it will need to move to a clearing house embedded in their payroll software or use a standalone super clearing house service.
Employment Hero and HeroClear: The Furthest Along
Employment Hero is currently the most advanced Australian payroll platform for Payday Super readiness. Their embedded clearing house, HeroClear, processed Australia's first real-time super payment from within a payroll platform during a pilot in late 2025. For Employment Hero users, Payday Super can be handled automatically — the clearing house sits inside the platform, so when you run a pay cycle, super is submitted to the clearing house in the same step.
The AI components of Employment Hero's payroll validate each pay run before it is submitted, flagging awards breaches, incorrect super calculations, and STP errors before they reach the ATO. For businesses on Modern Awards — retail, hospitality, construction — this automated checking is genuinely valuable given how complex award interpretation can be.
Employment Hero pricing starts at around $8 AUD per employee per month for the payroll module. For a business with five employees, that is $40 per month for payroll that handles STP, Payday Super, award compliance, and HeroClear automatically.
Xero Payroll: Capable but Watch the Clearing House
Xero Payroll handles STP Phase 2 natively and calculates super correctly. The gap is that Xero uses external clearing houses — it connects to services like Beam (previously SuperChoice) rather than having its own. For Payday Super, Xero will process per-payday super but you need to confirm which clearing house is connected to your account and whether that clearing house is ready for the new frequency.
If you are on Xero Payroll, log into your super payment settings now and check your clearing house configuration. Xero's support documentation has a Payday Super readiness guide that walks through the steps required for each clearing house option.
Payroller: The Free Option for Micro-Businesses
Payroller is an Australian-built, ATO-approved payroll tool that is free for businesses with up to 20 employees. It is STP Phase 2 compliant and has confirmed Payday Super readiness on its roadmap for mid-2026. For a sole trader with one or two employees who cannot justify paying for Employment Hero or Xero Payroll, Payroller is worth evaluating now rather than scrambling to switch in June.
The trade-off is that Payroller does not have the AI award interpretation engine that Employment Hero offers. If your employees are on straightforward flat rates or simple Modern Awards, that is probably fine. If you have complex award obligations with penalty rates and multiple allowances, a more capable platform is worth the cost.
How the Three Main Tools Compare
| Tool | Payday Super ready | Clearing house | Price (AUD) | Best for |
|---|---|---|---|---|
| Employment Hero | Yes — HeroClear embedded | Built-in | ~$8/employee/month | 5+ employees, Modern Award businesses |
| Xero Payroll | Yes — external clearing house | External (e.g. Beam) | Included in Xero plan | Existing Xero users |
| Payroller | Mid-2026 roadmap | TBC | Free (up to 20 employees) | Micro-businesses, 1–2 employees |
What You Should Do Now
- Confirm your payroll tool's readiness. Check whether your current software has a Payday Super go-live date — do not assume it will just work on 1 July.
- Replace the SBSCH if you use it. Start evaluating embedded clearing houses now so you are not switching under pressure in June.
- Model your cash flow impact. Shifting from quarterly to fortnightly super is a real cash flow event for some businesses — factor it into your working capital planning before July.
- Set up auto-pay in your clearing house. The smoothest transition is one where super payments go out automatically each pay cycle without manual intervention.
The businesses that will have the smoothest transition are those already on Employment Hero or a Payday Super-ready payroll platform, with auto-pay configured. Everything else is a process change that takes time to set up correctly.
Broader payroll software comparison
For a full comparison of AI payroll tools for Australian small businesses — including Employment Hero, Xero Payroll, and KeyPay — see our guide to best AI payroll tools for Australian small businesses in 2026.