Payday Super changed more than the timing of superannuation payments.
From 1 July 2026, the maximum contribution base (MCB) for Super Guarantee purposes moved from a quarterly limit to an annual limit.
For the 2026–27 financial year, the maximum contribution base is $270,830. At the 12% SG rate, this produces a maximum compulsory SG amount of approximately $32,500 for the year.
That change matters most for employers with:
- high-income employees
- executives
- sales teams receiving commissions
- employees receiving substantial bonuses
- employees with variable earnings
- employees whose earnings fluctuate significantly during the year
The key issue is that employers can no longer think about the maximum contribution base as a simple quarterly ceiling.
What is the maximum contribution base?
The maximum contribution base is the maximum amount of an employee’s earnings on which an employer is required to pay compulsory Super Guarantee contributions.
For 2026–27:
Annual maximum contribution base = $270,830
With the SG rate at 12%, the maximum compulsory SG amount based on that annual base is approximately:
$270,830 × 12% = $32,499.60
The annual structure applies from 1 July 2026 alongside Payday Super.
What changed from the previous system?
Before Payday Super, the maximum contribution base was calculated on a quarterly basis. For 2025–26, the maximum contribution base was $62,500 per quarter.
From 1 July 2026, the limit became an annual figure of $270,830. This difference is important because employers can no longer simply apply a quarterly maximum to every pay period.
The annual MCB needs to be considered across the employee’s financial-year earnings.
Why the annual MCB matters under Payday Super?
Payday Super moves SG calculations closer to each individual pay event.
That creates a practical requirement for payroll systems:
The system needs to know where the employee is against the annual MCB.
Consider an employee whose qualifying earnings are:
- July: $20,000
- August: $20,000
- September: $25,000
- October: $30,000
- November: $35,000
- December: $40,000
The employer cannot independently assess each payday as though it were an isolated calculation.
The payroll system needs to track the employee’s financial-year-to-date qualifying earnings and determine how much of the annual MCB remains.
High earners are not the only employees affected
It would be easy to assume the annual MCB only matters for executives.
That is too narrow.
Employees with variable remuneration can also move towards the MCB unexpectedly.
For example:
- sales employees with large commissions
- senior employees receiving bonuses
- professionals with performance incentives
- employees with substantial allowances that form part of qualifying earnings
- contractors who are employees for SG purposes
- employees with significant variable earnings
A worker may not look like a high earner at the beginning of the financial year but cross the annual threshold later.
The Payday Super complication: qualifying earnings (QE)
Another reason employers need to review their MCB process is the introduction of qualifying earnings (QE).
From 1 July 2026, SG under Payday Super is calculated using qualifying earnings rather than simply relying on the previous OTE terminology.
The ATO describes qualifying earnings as including OTE plus specified additional types of earnings, remuneration and payments.
This means payroll systems need to correctly classify payment types before calculating SG.
That is especially important for employees with variable remuneration.
The question to ask is:
“How much qualifying earnings has this employee accumulated for SG purposes?”
Variable pay can make the MCB harder to manage
Consider a sales employee who receives:
- base salary
- monthly commission
- quarterly performance bonuses
- annual bonus
Their earnings pattern may look like this:
Base salary → commission → commission → large bonus → commission → annual bonus
The employee may cross the annual MCB during a high-variable-pay period.
The payroll system then needs to identify:
- qualifying earnings for the current payday
- year-to-date qualifying earnings
- the remaining amount under the annual MCB
- the SG payable on the relevant qualifying earnings
- whether the employee has reached the annual MCB
This is a payroll calculation problem, not something that should be left to an annual manual reconciliation.
Example: employee reaches the MCB during a pay period
Assume an employee has accumulated:
$265,000 of qualifying earnings during 2026–27.
Their next payday includes:
$15,000 of qualifying earnings.
The employee does not have $15,000 of remaining MCB.
They have:
$270,830 − $265,000 = $5,830
of remaining annual MCB.
The payroll calculation therefore needs to account for the remaining MCB rather than simply applying 12% to the full $15,000.
This is exactly the type of edge case that becomes more difficult when employers rely on spreadsheets or manually maintained year-to-date calculations.
What happens after the employee reaches the annual MCB?
Once an employee’s qualifying earnings reach the annual maximum contribution base, the employer is not required to continue paying compulsory SG on qualifying earnings above the limit for that financial year.
For 2026–27, that means compulsory SG is capped based on the $270,830 annual MCB.
However, employers should distinguish between:
minimum compulsory SG obligations and any additional superannuation obligations under employment contracts, awards, enterprise agreements or other arrangements.
The MCB does not automatically mean an employer can stop all employer super contributions in every circumstance.
Why annual MCB creates a payroll-system requirement
A manual spreadsheet might be able to track the MCB for a small number of high earners.
The problem becomes harder when the business has:
- hundreds of employees
- multiple pay frequencies
- commissions
- bonuses
- back pay
- out-of-cycle payments
- employee transfers
- changes in remuneration
- multiple payroll entities
The system needs to maintain a consistent financial-year-to-date calculation.
That means the payroll system should be able to distinguish between:
current-pay earnings and year-to-date qualifying earnings.
What employers should check in their payroll system
Ask your payroll provider how it handles:
- Annual MCB tracking
Does the system track the employee’s MCB across the financial year?
- Partial MCB usage
Can it calculate SG when only part of the employee’s current qualifying earnings falls below the remaining MCB?
- Variable pay
Does it correctly classify commissions, bonuses and other payments for QE purposes?
- Multiple pay runs
Can the system correctly handle employees who receive more than one qualifying earnings payment?
- Employee changes
What happens when an employee changes payroll entities or payroll systems during the financial year?
- Year-end reset
Does the MCB automatically reset at the beginning of the new financial year?
These are more useful questions than simply asking whether a payroll system is “Payday Super compliant”.
Workstem automates Payday Super calculations across every pay run
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Frequently asked questions
Q1: What is the maximum contribution base for 2026–27?
A1: The annual maximum contribution base is $270,830 for the 2026–27 financial year.
Q2: What is the maximum SG amount based on the 2026–27 MCB?
A2: At a 12% SG rate, the maximum compulsory SG amount based on the annual MCB is approximately $32,499.60.
Q3: Is the maximum contribution base still quarterly?
A3: No. From 1 July 2026, the maximum contribution base changed from a quarterly limit to an annual limit.
Q4: Does the annual MCB matter for employees with variable pay?
A4: Yes. Employees receiving commissions, bonuses or other variable earnings can approach or reach the annual MCB during the financial year, making year-to-date tracking important.
Q5: Does reaching the MCB mean an employer can stop all super contributions?
A5: Not necessarily. The MCB limits compulsory SG obligations, but employers should separately consider contractual, award, enterprise agreement and other obligations.
Read More:
More Payday Super related articles
Payday Super Australia 2026: Real-Time Superannuation Payment Guide
How Payday Super Affects Your Business
Payday Super Cash Flow Management: Avoiding Business Disruption
What Actually Breaks Payday Super: 7 Operational Failure Points
MVR Explained for Employers: What Happens Before Super Is Sent
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