Payroll Compliance Checklist for 2026

1. Single Touch Payroll (STP) Reporting

• Ensure all employee payments (wages, allowances, bonuses, super) are reported to the ATO via STP.
• Tip: Check that your payroll software is updated to handle STP Phase 2 requirements.

2. Fair Work Compliance

• Keep up-to-date with the Fair Work Act, Modern Awards, and Enterprise Agreements.
• Ensure correct rates for overtime, leave loading, and penalties.

3. Superannuation Contributions

• Pay super at least quarterly at the correct Super Guarantee rate.
• Verify employee eligibility and ensure contributions go to the nominated super fund.

From 1 July the Australian Government’s Payday Super reforms will require employers to pay superannuation guarantee (SG) contributions on the same schedule as employee wages — not quarterly as occurs under the current system.

This means:

• Super contributions must be paid each payday — weekly, fortnightly, or monthly — and must **reach the employee’s nominated super fund within seven business days of the pay run.
• Employers will need to ensure their payroll systems, processes and reporting are updated to support this new timing. This includes changes to Single Touch Payroll (STP) reporting (including Qualifying Earnings and Super Liability fields) so the ATO can match super payments with pay runs.
• The ATO’s Small Business Superannuation Clearing House (SBSCH) will be phased out and no longer available from 1 July 2026, so alternative arrangements or software integrations should be in place ahead of time.

What we recommend you do now:

• Review your payroll and super processes to ensure they can handle per-pay-cycle super payments.
• Speak with your payroll software provider about upcoming updates or required configurations.
• Check your processes for collecting and verifying employee super fund and tax details.
• Plan your cash flow to accommodate more frequent super payments.
• Train payroll, HR and finance staff on the new requirements.

We are here to support you through this transition and can assist with planning, system readiness, and compliance. Please contact us if you’d like help assessing your current setup or preparing for the 1 July 2026 changes.

4. Payroll Tax

• Confirm whether your business meets the state payroll tax threshold.
• Lodge returns and pay payroll tax on time.

5. Leave Entitlements

• Track employee leave balances accurately, including annual leave, personal leave, and long service leave.
• Keep written records of leave accruals and approvals.

6. Employee Classification

• Correctly classify staff as employees vs contractors.
• Misclassification can result in penalties and back-payment obligations.

7. Termination Payments

• Calculate final pay correctly, including unused leave, notice periods, and redundancy payments.
• Lodge STP finalisation reports if applicable.

8. Record-Keeping

• Maintain payroll records for at least 7 years, including payslips, leave records, and tax documents.
• Digital records are acceptable but must be secure and accessible.

9. PAYG Withholding

• Deduct and report PAYG withholding accurately.
• Ensure end-of-year summaries and reports are submitted to the ATO on time.

10. Stay Updated

• Payroll legislation, awards, and tax rates change regularly.
• Schedule a quarterly review to ensure compliance and avoid surprises.

Pro Tip from BMO:

Automating payroll through Xero or Employment Hero and syncing with STP reporting can save hours of work and reduce errors—giving you peace of mind and happy employees.