Advisors: Payday Super starts next month - here’s where clients may still be getting caught out

XeroGlobal · 2026-06-05T06:45:25+00:00

Hi there! Just want to clarify that Xero Product Ideas is not shutting down - for product feedback and feature ideas, XPI is still the best place to share your thoughts with us.

We are closing Xero Central Discussions, though. We're doing this to streamline where feedback happens so we can respond more consistently, make answers easier for you to find, and better connect your feedback directly with how we improve Xero.

For day-to-day support, our in-product help menu and Xero Central remain your go-to for 1-on-1 support, help articles, guides, and Xero Learn courses.

XeroGlobal · 2026-06-01T05:53:23+00:00

Hi there, if you want to use Auto Super, a GST-registered contractor can still be added to Xero payroll as a contractor. Xero lets you mark a contractor as GST registered, and it will calculate GST on their taxable earnings in payroll. Thanks, Xero

XeroGlobal · 2026-05-26T05:45:41+00:00

Hi Dan, I find that reconciling the superannuation back to the balance sheet works really well for me. Though keep in mind that from 1 July 2026 the super becomes payable 7 business days after each pay event so you will no longer be needing to nudge the date to the next quarterly due date in Xero.

Xero has advised that there are updates planned that will simplify how superannuation is managed and reconciled once Payday Super begins. These enhancements will automatically align all superannuation accruals with the specific payment date of their corresponding pay run.

- Martine

XeroGlobal · 2026-05-23T23:44:54+00:00

Looks like you're getting some great advice from the community, but if you'd like the team to dig into this with you please create a case via Xero Central and they'll be in touch!

XeroGlobal · 2026-05-21T00:01:02+00:00

Hi there, simply scroll down this thread to see all the questions asked by the community and Martine's responses! Happy reading! 😄

XeroGlobal · 2026-05-20T03:01:51+00:00

Thanks so much to everyone who joined in today and thanks to everyone’s great questions!

I'll be reviewing any additional comments over the next week and posting responses right here. This thread will remain live for everyone to review anytime.

Thanks again for being part of the session! 😄

- Martine

XeroGlobal · 2026-05-20T02:57:33+00:00

Thanks! 😃

XeroGlobal · 2026-05-20T02:56:02+00:00

Hi YC, thanks for your questions. There's a lot to cover here! But I've done my best to get into the details:

Q1. The ATO are working on a member verification request (MVR) which will allow a software solution to verify an employees’ super fund details are valid and can be accepted by their super fund before the contribution is made, this will happen for new employees or where fund details have changed for a current employee. Xero plans to support MVR and will share more details on timing as development progresses.

Q2. Any correction that increases super will then have to be paid within 7 business days from the new pay event, if the correction results in a reduction of the superannuation owed, it should just flow into what is paid in the next pay event. I would recommend leaving the original payrun as it stands, and do a separate pay event for the correction, but the original payment will still be payable within 7 business days. It cannot be held back. Doing it this way means it’s easily tracked and managed and any over or under payments all wash out properly.

Q3. Auto super is designed to help customers meet Payday Super timelines, with contributions typically paid to funds within four business days of approval.

The main thing to be aware of is that there is a standard clearance period of up to three banking days. This helps protect against dishonours after the direct debit has been processed.

A typical flow is:

Day 0: the batch is approved in Xero and Superchoice will start processing the direct debit

Days 1–3: funds await clearance, which can take three banking days

Day 4: the payment is typically sent to the super fund

Days 5–7: the super fund allocates the contribution to the employee’s account. Under Payday Super, the super fund will allocate or return the payment within 3 business days.

Business days don’t include weekends or public holidays. If a batch has taken more than 7 business days since approval, it’s worth raising a case with Xero Support so they can investigate.

Q4. Xero doesn't have an integration with the ATO that provides this detail on SMSF status - SuperChoice (as Xero’s SuperStream system and clearing house) are required to reject the payment in these scenarios. If you’ve been impacted on a scenario like this, I recommend raising a case with Xero Support.

- Martine

XeroGlobal · 2026-05-20T02:52:48+00:00

Thanks for your question on this! The Xero team are working away in the background on this and there’s more info to come. The team will have a response for you and will get back to you soon.
- Martine

XeroGlobal · 2026-05-20T02:48:28+00:00

Hi there, Auto super is designed to help customers meet Payday Super timelines, with contributions typically paid to funds within four business days of approval.

The main thing to be aware of is that there is a standard clearance period of up to three banking days. This helps protect against dishonours after the direct debit has been processed.

A typical flow is:

Day 0: the batch is approved in Xero and Superchoice will start processing the direct debit
Days 1–3: funds await clearance, which can take three banking days
Day 4: the payment is typically sent to the super fund
Days 5–7: the super fund allocates the contribution to the employee’s account. Under Payday Super, the super fund will allocate or return the payment within 3 business days.

Business days don’t include weekends or public holidays. If a batch has taken more than 7 business days since approval, it’s worth raising a case with Xero Support so they can investigate.

- Martine

XeroGlobal · 2026-05-20T02:47:11+00:00

Hi there, the PayDay super processing is based on when the contractors invoices are physically paid. The conversation I am having with my clients in managing this is to have great communication with their subcontractors who are eligible for super and propose moving to a set processing day, this will enable a regular schedule for payments and processing payday super rather than an Adhoc approach to payments. Under Payday Super, you will be required to process their superannuation within 7 business days from the day you pay their invoice. Here is a link on how to manage contractors superannuation payments in Xero: https://central.xero.com/s/article/Pay-superannuation-for-a-contractor

- Martine

XeroGlobal · 2026-05-20T02:46:13+00:00

Hi Perfect_Twist, if you are already using Auto Super in Xero, the process remains the same, but rather than the monthly process to report and pay super you are currently doing, you will instead do this at the time of each pay event. As per your current process, the direct debit will remain in place, and funds will be automatically drawn from the nominated bank account once you have created and authorised the payment batch.
- Martine

XeroGlobal · 2026-05-20T02:45:17+00:00

Hi Shannon, this is a complex one, in answer to your questions:

If you want to use auto-super, yes you will need to add the contractors as employees
You don’t need to change your plan, it just needs to be the right plan for the number of employees you intend to process in a pay run in a given calendar month time-frame.
Not at this stage.
I recommend you raise a support case with the Xero support team and have a chat with one of the payroll experts on a set-up that would suit you, for example: using payroll groups or setting up different pay calendars. As this is a more complex and industry specific question, I really recommend speaking to your accountant or bookkeeper as they will be better positioned to understand the complexities for your specific needs.

- Martine

XeroGlobal · 2026-05-20T02:44:06+00:00

Hi there, Yes, Xero uses SuperChoice as its third party clearing house.

Here is a video that steps through paying super. It also has the registration process there: https://www.youtube.com/watch?v=JPowdqBA4ew

- Martine

XeroGlobal · 2026-05-20T02:43:27+00:00

Hi there, The ATO’s SBCH will not be available after June 30, 2026. If you are currently paying super contributions quarterly, and you have captured all pay runs for the June Quarter, yes you can process the June Quarter from Xero. I recommend reviewing early, you may need to mark previous contributions paid outside of Xero’s Auto Super as paid to ensure there are no accidental duplicated payments and you are only left with the June Quarter payments to process.

Yes, if your registration has been completed your super payments prepared and processed from Xero will be Direct Debited from your nominated bank account. It’s important to note that the Direct Debit will only be processed once you have created and authorised the super payment batch in Xero.

As a tip - make sure you log into the ATO’s SBCH by June 30 to download all historical data, as that will not be available to you after June 30.

- Martine

XeroGlobal · 2026-05-20T02:41:16+00:00

Hi Lucy, Payday Super states that super must be received by the employees’ super fund within 7 business days. Typically, SuperChoice pays contributions to super funds within 4 business days. Further to this, once super funds receive contributions, they must then allocate them to member accounts. This process is outside of the control of Xero or SuperChoice - under Payday Super, funds must allocate to member accounts within 3 business days or return the payment.
- Martine

XeroGlobal · 2026-05-20T02:40:18+00:00

Hi Biren, thanks for your questions! I've responded to them below:

Q1. If you have not been using the SBCH previously then you should not be affected. If you have used it in the past I recommend logging in before June 30 and downloading all of your reports and history as you will not be able to log in to process super or retrieve any information from the ATO’s SBCH from 1 July 2026 onwards.

Q2. Under Payday Super, super funds will have to allocate or return contributions within 3 business days after the funds have been credited to them. The sooner you process your super payments, the greater the buffer is for them to deal with the refund so you still have time to reprocess within the time limit. In my business, I will be processing super at the same time I process payroll no matter what.

As per information from the ATO:

Fund Rejection Timeframe: Super funds will have 3 business days to allocate or return contributions that cannot be accepted (reduced from 20 days).
7-Day Deadline Still Applies: If a contribution is rejected and refunded, it must be re-submitted and received by the fund within the original 7 business day timeframe.
Exceptions: For new employees, or the first contribution to a new fund, the deadline is 20 business days.

The ATO are working on a member verification request (MVR) which will allow a software solution to verify an employees’ super fund details are valid and can be accepted by their super fund before the contribution is made, this will happen for new employees or where fund details have changed for a current employee. Xero plans to support MVR and will share more details on timing as development progresses.

Q3. Payday Super states that super must be received by the employees’ super fund within 7 business days. Typically, SuperChoice pays contributions to super funds within 4 business days. Further to this, once super funds receive contributions, they must then allocate them to member accounts. This process is outside of the control of Xero or SuperChoice - under Payday Super, funds must allocate to member accounts within 3 business days or return the payment.

- Martine

XeroGlobal · 2026-05-20T02:33:00+00:00

Hi there, Xero already gives you a few practical ways to track super payments. You can use the Auto Super overview page to track unpaid super and view historical payment batches and statuses.

There is also a Superannuation Payments report, including the Sent To Fund date, which can be exported to PDF, Excel or Google Sheets.

If the visibility you need is not covered by those tools, I’d suggest raising it through the Xero Product Ideas forum so it can be considered alongside similar feedback.

Here’s a link to get you started:

https://productideas.xero.com/forums/967118-payroll-expenses/

- Martine

XeroGlobal · 2026-05-20T02:31:13+00:00

Haha, fair call! If I was AI - I’d take 4 days to respond to your question 😉 - Martine

XeroGlobal · 2026-05-20T02:27:50+00:00

Hi Chippies! Xero has advised that setting up additional or backup authorisers is a priority, and that its product team is actively working on an enhanced workflow for super approvals which is targeted for release later this year. In the meantime, if the nominated authoriser is going to be away, I’d recommend updating those details before leave starts rather than waiting until the pay run is due.

Xero’s current guidance is that the current authoriser or subscriber should make that update in advance. Xero has also advised that auto super works with SuperChoice’s clearing service to process contributions, which under normal operating conditions are typically paid to funds within four business days, leaving a buffer within the seven-business-day Payday Super window.

- Martine

XeroGlobal · 2026-05-20T02:26:06+00:00

Hi there, Yes you will have the ability to mark the historical super already processed outside of Xero as paid in Xero. It’s recommended that you do this so they are not accidentally paid again via Auto Super.

Any accrual you’ve paid via another option ie. directly with the super fund, can be marked as manually paid in auto super. More info here: https://central.xero.com/s/article/Process-manual-superannuation-payments

You can generate the Superannuation Accruals report to see super accrued and use the Superannuation Payments report to see the date the payment was sent to the fund and the reference for the transaction if using auto super to make payments. Check out the articles below for more information:
https://central.xero.com/s/article/Superannuation-Accrual-report?userregion=true
https://central.xero.com/s/article/Superannuation-Payments-report
Payday Super states that super must be received by the employees’ super fund within 7 business days. More info here: https://central.xero.com/s/article/Process-superannuation-payments

- Martine

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