The Council of Small Business Organisations Australia (COSBOA) has expressed concerns about the impact of proposed superannuation changes on SMEs.
On Wednesday, the Treasury announced a proposed change in superannuation policy that is set to become effective on July 1, 2026. The change will require employers to pay Superannuation Guarantee (SG) contributions to employees with every pay cycle, instead of just quarterly.
COSBOA is concerned that a shift will increase administrative and financial burdens on small businesses.
“Employers will be required to make up to 13 times as many payments, handle up to 13 times as many transactions, and ultimately incur up to 13 times the cost to ensure super reaches their employees accounts under this new arrangement,” said COSBOA CEO Luke Achterstraat. “This is an overwhelming ask, particularly for small businesses already struggling with tight margins.”
Penalties for delayed payments
On top of increased obligations, employers could pay if super funds fail to process payments quickly. If super payments don’t arrive in employee’s accounts within seven days, employers will be charged interest.
“This change appears to overlook the reality of running a small business,” said Achterstraat. “It is not the employer’s fault if others in the chain can’t process promptly.”
Government to shut down crucial free resource
The proposed policy change will coincide with the closure of the ATO-managed Small Business Superannuation Clearing House.
The free online service lets employers pay employee super contributions in one transaction, regardless of the number of funds. Its closure leaves 250,000 small employers to make alternative, potentially costly, arrangements.
COSBOA is urging the government, parliament, and opposition parties to reconsider the proposed changes to superannuation payment obligations.
“Small business is the backbone of the Australian economy,” added Achterstraat. “Imposing additional costs and compliance requirements on them will only serve to undermine their ability to thrive and support their communities.”
Previous research by ScotPac revealed that two-thirds of SMEs are concerned about the impact of the rising Superannuation Guarantee on their businesses. Now, they may face even greater challenges when it comes to meeting superannuation obligations.
