Managing Your Payroll and Super: 2026 Updates for Sole Directors

If you operate your business through a company structure and act as its sole director and employee, you are classified as a “small business entity” with a “closely held payee”. Recently, significant changes have come into effect regarding how and when you report your payroll and pay your superannuation.

Here is a comprehensive breakdown of your Single Touch Payroll (STP) obligations and the new Payday Super requirements that commenced on 1 July 2026.

1. Single Touch Payroll (STP) Concessions for Sole Directors

Under the STP regime, employers must report their employees’ payroll information to the Australian Taxation Office (ATO) each time they are paid. However, if your business has 19 or fewer payees, it qualifies as a “small employer”. ¹ As a company director, you are considered a “closely held payee” because you are directly related to the entity paying you. ¹

Because you are a small employer dealing exclusively with a closely held payee, the ATO provides concessional reporting options. ² You are not strictly forced to report on the exact day you draw funds. Instead, you may choose one of three reporting methods:

1. Actual payments on or before the date of payment: Reporting each time you draw a wage. ²
2. Actual payments quarterly: Reporting the actual amounts paid to yourself each quarter, due when your Business Activity Statement (BAS) is due. ²
3. Reasonable estimate quarterly: Making a reasonable estimate of the amounts drawn during the quarter and reporting that through STP. ²

“If you’re a small employer (19 or fewer payees), you can report these amounts on or before each payday, or you can choose to report this information quarterly.” ¹

End-of-year Finalisation: For businesses that only have closely held payees (i.e., you have no arm’s-length employees), the deadline to lodge your end-of-year STP finalisation declaration is extended. You have until the due date of your individual income tax return to finalise your STP reporting. ³

2. The New Payday Super Regime

On 1 July 2026, the new “Payday Super” regime officially commenced, radically changing the timing of superannuation guarantee (SG) payments. ⁴ ⁵

The Current SG Rate: First, note that under section 19(2) of the Superannuation Guarantee (Administration) Act 1992, the SG charge percentage for the financial year starting on or after 1 July 2025 is 12%. ⁶ You must calculate your superannuation liability as 12% of your qualifying earnings.

The 7-Business-Day Rule: Previously, SG contributions could be made quarterly. Under the new Payday Super rules, SG payments must be routed much faster. The date you pay your wages or qualifying earnings is known as the “QE day”. ⁴ According to Draft Law Companion Ruling LCR 2026/D2, your SG contribution is only considered “on-time” if it is received by the superannuation fund within the “usual period”, which is 7 business days after the QE day. ⁷

“A contribution for a QE day is on-time if it is received by the employee’s superannuation fund within any of the following periods: … the period starting on the QE day and ending on the seventh business day after the QE day (usual period)…” ⁸

Note on exceptions: While the 7-business-day rule applies generally, LCR 2026/D2 provides an “allowable longer period” of 20 business days for specific situations, such as a new worker engagement or when an employee changes their superannuation fund. ⁷ ⁹ As a sole director with an established fund, this extended period will rarely apply unless you restructure or change your own superannuation fund.

3. Closure of the Small Business Superannuation Clearing House (SBSCH)

For many years, small businesses utilised the ATO’s free SBSCH to process their super payments. As part of the Payday Super reforms, the SBSCH was permanently closed on 1 July 2026. ¹⁰

You can no longer use the SBSCH to make your SG payments or download records. ¹¹ To remain compliant with the rapid 7-day payment window, you must now use an alternative commercial clearing house or ensure your STP-enabled payroll software has integrated superannuation clearing functionality. ¹⁰

Summary of Obligations

For completeness, below is a summary table of the key dates and outcomes for a sole director company under the current 2026 rules: