It’s 11:30 PM on a Tuesday. You’re staring at a spreadsheet that looks more like a game of Sudoku gone wrong, trying to figure out why your payroll total doesn’t match your bank statement. Your eyes are heavy, the coffee is cold, and that nagging feeling in your gut says something in your payroll setup is… off.
Sound familiar? You’re definitely not alone.
Running a business in Australia is a bit like keeping a diary: it’s all fun and games until you realize you’ve skipped three weeks and the "ATO inspector" (or your conscience) is knocking. But right now, the stakes are higher than ever. With the July 1 Payday Super deadline fast approaching, "winging it" is no longer an option.
If you’re still treating superannuation like a quarterly chore rather than a payday priority, you’re basically flying blind into a storm. At KB Accounts, we see these mistakes every day. The good news? They’re all fixable.
Here are the 7 most common payroll mistakes we’re seeing right now, and how you can dodge the SGC (Super Guarantee Charge) bullet before the clock strikes midnight on June 30.
1. Are you still using the "Quarterly" mindset?
For years, the "quarterly super" rhythm was the heartbeat of Australian small business. You paid wages weekly or fortnightly, but you didn't have to worry about the super until the end of the quarter.
The Mistake: Thinking you still have a "grace period."
From July 1, the ATO is moving to Payday Super. This means super must be received by the employee’s fund within 7 business days of payday. There is no "catch-up" window anymore. If you're late, you're late.
The Fix: Update your cash flow forecast now. You need to be ready for more frequent, smaller outflows rather than one big quarterly hit. If your Xero setup isn't configured for per-pay-cycle super, you're already behind.
2. Is your "Calculation Base" stuck in 2024?
This is a technical one, but it’s where most people get tripped up. Most employers calculate super on Ordinary Time Earnings (OTE).
The Mistake: Not switching to Qualifying Earnings (QE).
The new framework shifts the focus to QE, which is a broader bucket. It can include things like commissions, certain director fees, and even salary-sacrifice amounts that weren't always included in the OTE calculation.
The Fix: Review your pay categories. If your software is still mapped to the old OTE fields, you might be systematically underpaying your team. This is a one-way ticket to an ATO Super Audit.
3. Still ghosting your contractors?
"They have an ABN, so I don't pay their super, right?"
The Mistake: Assuming "Contractor" means "No Super."
In many cases, if a contractor is paid wholly or principally for their labor, they are considered an employee for super purposes. This is a massive "gotcha" that triggers thousands of SGC penalties every year.
The Fix: Check your contracts. If you’re hiring a creative freelancer or a tradie who provides mostly their time and skills, you likely owe them super. Don't let a "cheeky coffee" agreement turn into a $20,000 tax bill.
4. Relying on the "Old School" Clearing House?
If you’ve been using the ATO Small Business Superannuation Clearing House (SBSCH), we have some news.
The Mistake: Staying on the SBSCH past its use-by date.
The SBSCH is officially closing its doors on June 30, 2026. If your payroll setup is still pointing there for your July payments, your money will have nowhere to go.
The Fix: It’s time to move to a SuperStream-compliant clearing house or use the integrated features within your software (like Xero's Auto Super). This ensures the data goes straight from your pay run to the fund without you having to manually type in 15 different USIs.
5. Misunderstanding the "New Employee" rule?
The ATO is giving us a tiny bit of breathing room for new hires, but it’s easy to misread.
The Mistake: Thinking you have 20 days for every payment for a new hire.
You actually have 20 business days only for the very first contribution to a new fund or for a new employee. After that, they go straight onto the standard 7-day rule.
The Fix: Don’t wait for the 20-day mark. Treat every employee the same from Day 1. It keeps your system clean and ensures you don't accidentally miss the deadline for their second pay run.
6. Set and forget? (The "STP" Trap)
Single Touch Payroll (STP) was supposed to make life easier, and it does: until the data you send to the ATO doesn't match the money you actually paid.
The Mistake: Not reconciliation-ing your STP reports.
The ATO now uses real-time data to compare what you say you owe in super (via STP) with what the super funds say they received. If there’s a gap, a red flag goes up in their system automatically.
The Fix: Perform a monthly reconciliation. Ensure your financial reporting reflects reality. If you’re "flying blind" here, the ATO will be the first to let you know.
7. Ignoring the "Annual" Cap
Most of us are used to the quarterly Maximum Contribution Base (MCB).
The Mistake: Applying the quarterly cap instead of the new annual cap.
The framework is shifting toward an annual MCB (approx. $250,000). If you have high-income earners and your software isn't recoded to handle the annual limit, you’re going to over-calculate or under-calculate their super.
The Fix: Check your settings for high-value employees. This isn't just a compliance issue; it’s about making sure your top talent isn't getting hit with unexpected tax bills (or missing out on their retirement nest egg).
How to Save Your Sanity: The KB Accounts "Payroll Health Check"
If reading this list made your heart race a little, take a breath. You don’t have to do this alone. At KB Accounts, we specialize in Project Rescue. Whether your file is a mess of duplications and errors, or you just want a professional pair of eyes to ensure you're ready for July 1, we’re here to help.
Think of our Accounting Health Check like a visit to the doctor for your business. We audit your accounts, find the omissions, and optimize your settings so you can stop worrying about compliance and get back to actually running your business.
Don't Leave it Until June 30
The transition to Payday Super is the biggest shift in Australian payroll in a decade. It’s a strategic move, not just a paperwork one. By fixing these 7 mistakes now, you’re not just staying "ATO compliant": you’re building a business that is efficient, transparent, and ready for growth.
Ready to stop flying blind? Reach out to Kylee and the team today. Let's get your payroll sorted so you can finally get that late-night sleep you deserve.