<?xml version="1.0" encoding="ISO-8859-1"?> <docID>341139</docID> <postdate>2025-03-26 10:55:21</postdate> <headline>Jonno sees more work in new payday super</headline> <body><p><img class="aligncenter size-full wp-image-341143" src="https://citynews.com.au/wp-content/uploads/2025/03/pay-super-gail-freeman.jpeg" alt="" width="900" height="600" /></p> <p><span class="kicker-line"><span style="font-weight: 400;">Employer Jonno isn't happy with the prospect of the new payday super impost. Chartered accountant </span><b>GAIL FREEMAN</b><span style="font-weight: 400;"> confirms there's more office work, but some benefits, too.</span></span></p> <p class="p1"><span class="s1"><b>As an employer, Jonno isn't keen on the prospect of a new payday super regime, saying it seems that, annoyingly, he will have to pay super far more frequently. "Am I wrong, Gail,†he asked.</b></span></p> <p><img class=" wp-image-203068" src="https://citynews.com.au/wp-content/uploads/2020/03/Gail-Freeman-Co-director-Gail-Freeman-e1682553347305.jpg" alt="" width="348" height="382" /></p> <caption>Gail Freeman of Gail Freeman & Co.</caption> <p class="p2"><span class="s1">The draft legislation has a starting date for mandatory payday super as July 1, 2026. The Treasury released the draft legislation earlier this month and public comment ends on April 11. </span></p> <p class="p3"><span class="s1">"My answers to you are based on this draft legislation," I told Jonno.</span></p> <p class="p3"><span class="s1">"I suspect that any changes will be minimal and that the framework will apply as currently proposed. </span></p> <p class="p3"><span class="s1">"The important thing you need to know is that super has to be received by the ‘clearing house’ within seven days from the payment of staff salaries.</span></p> <p class="p3"><span class="s1">"That will impact cash flows for all businesses that are used to using a different interval for super payments. The current clearing house will shut down when payday super starts and will be replaced by a new clearing house, of which no details are yet available except that it will be more ‘suitable’. </span></p> <p class="p3"><span class="s1">"The difficulty for my business is that I will have to pay it weekly which means 52 payments per year as opposed to the present four. Unless the new clearing house is super-efficient, that means a lot more time will need to be spent on wages each week.â€</span></p> <p class="p3"><span class="s1">Jonno said: “That's exactly what I mean. I pay the boys weekly and this will make a big difference to my office staff.â€</span></p> <p class="p3"><span class="s1">I told Jonno that was correct.</span></p> <p class="p3"><span class="s1">"It is also important to note that the draft legislation doesn’t mean that you have a week to pay the super," I said.</span></p> <p class="p3"><span class="s1">"It means you have a week for the clearing house or the relevant fund to receive the super. So depending on the bank you use and the super funds in question, you may have to pay super within two days of payday to be certain of the funds arriving in the clearing house on time.</span></p> <p class="p3"><span class="s1">“There are a couple of useful things that I can tell you, the first is that most of the payroll programs now have a payday super option so you can start paying it now, which will assist you in making sure you're managing your cash flow correctly in advance of the legal requirements. "The seven days in the legislation are seven calendar days and not seven business days, which does make it a very short period for you to comply.â€</span></p> <p class="p3"><span class="s1">"If you find you've missed a payment there are a few changes which could be beneficial. The current situation is that if you pay staff super late then the super payment and all charges will be non-deductible.</span></p> <p class="p3"><span class="s1">"The new legislation proposes that the super will be deductible and any penalties and charges will not. So that is an improvement.</span></p> <p class="p3"><span class="s1">"Currently, if you pay super late the interest rate is a flat 10 per cent but going forward it will be pegged to the general interest charge rate, which is currently 11.42 per cent. </span></p> <p class="p3"><span class="s1">"This rate will be charged on a daily compounding basis so that will cost you more. Currently there is a $20 an employee a quarter penalty charged for all late payments. This will increase to a 60 per cent uplift which the tax commissioner has the discretion to remit. </span></p> <p class="p3"><span class="s1">"The $20 cannot be remitted under any circumstances. So you can see that there are swings and roundabouts in the proposed legislation.â€</span></p> <p class="p3"><span class="s1">While grateful for my advice, Jonno said he still wasn't happy, but would start making the payments from next month so he had a really good handle on it when it became law.</span></p> <p class="p2"><span class="s1"><i>If you need help with payday super or any tax, business or superannuation related matter, contact the expert team at Gail Freeman & Co Pty Ltd on 02 6295 2844, email <a href="mailto:info@gailfreeman.com.au">info@gailfreeman.com.au</a> or visit <a href="http://gailfreeman.com.au">gailfreeman.com.au</a></i></span></p> <h6 class="p4"><b>Disclaimer<br /> </b>This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.</h6> </body>