BDO Australia has warned Payday Super reforms will be administratively challenging for the Not-for-Profit (NFP) sector, where a significant number of employees work less frequently and for short engagements.

In October 2023, the Treasury released a consultation paper on Securing Australians’ Superannuation Budget 2023-24 (Payday Super). Its reforms require employers to make superannuation contributions on the same day they pay salary and wages, rather than quarterly.

BDO Australia explain that, due to the nature of the NFP sector and the presence of shift workers, there may be smaller or less frequent salary payments made to employees. Where Payday Super is applicable, the employer will have an increased administration burden (i.e. obtaining and processing super fund details) to make super contributions for employees for each pay period; noting there are often small payments that these are based on (particularly since the $450 per month threshold was removed on 1 July 2022).

In its submission, BDO Australia has recommended introducing a de-minimus rule for the superannuation shortfall, such that no shortfall component should arise where the superannuation shortfall is less than a certain amount (e.g., $20). No applicable superannuation guarantee charge would also occur in those circumstances.