How Australian small businesses can prepare for a new era of superannuation

The Australian Taxation Office (ATO) has announced a significant change that will affect the way around 250,000 Australian businesses manage superannuation payments. The ATO’s Small Business Superannuation Clearing House (SBSCH), a service used by these small businesses to make quarterly super contributions, will be closing.

The SBSCH is set to be fully retired from 30 June 2026, with new users unable to join from 1 October 2025. 

Why are these changes proposed?

The proposed payday super reform, if legislated, would require employers to pay super at the same time as wages, replacing the current quarterly cycle. As a manual system, the SBSCH isn’t designed for this frequency and won’t be fit for the future direction of super in Australia.

Payday super aims to create a fairer, more transparent system that better protects Australians’ retirement savings. Aligning super payments with wages helps streamline payroll, reduce admin, and minimise missed or late payments, especially when using digital tools like Xero. For employees, it offers greater visibility and confidence that their super is being paid on time.

I currently use the SBSCH. What should I do?

For Aussie small businesses relying on the SBSCH, this might feel like just another challenge to navigate. But the good news is, Xero already has the tools and infrastructure in place to help you migrate away from the clearing house comfortably.  

• Auto super: Xero’s auto super feature streamlines the entire process of calculating and paying super contributions directly from within Xero payroll. This helps you stay compliant, save time, and eliminate manual processing. Many of our customers and their advisors already use auto super, with many already choosing to pay super on a per-pay-run basis.
  
• Increased payroll capacity: We recently increased payroll capacity on our Ignite and Grow plans. This makes our auto super service available to even the smallest businesses as a simple alternative to the ATO’s SBSCH.

What’s next?

If you’re currently using the SBSCH, you can continue to do so until it officially closes on 30 June 2026. The final quarterly payment you’ll be able to process is for the March 2026 quarter. In view of this, we recommend switching to Xero’s auto super sooner rather than later. It’s an easy way to stay ahead of the changes and benefit from a faster, more streamlined process. 

If you’d like to see Auto Super in action, join one of our free webinars to see a step-by-step walkthrough of how to set it, process contributions and prepare for upcoming Payday Super changes. Log in to Xero Central to view upcoming sessions and register.

We’ll keep championing small businesses

As the ATO wraps up the SBSCH chapter in Australia, the proposed payday super reforms present a valuable opportunity to simplify payroll, stay compliant, and provide better support for your employees. But for these reforms to work and remain manageable for small businesses, the details need to be properly considered.

Rest assured, we’re working closely with the government alongside other key groups to ensure the changes reflect the realities of running a business in Australia. And as always, we’ll keep you informed and supported every step of the way.