Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026

Administered by Department of Finance

Legislation au F2026L00648 In force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by the Minister for Finance

Superannuation (Productivity Benefit) Act 1988

Declaration under section 3D

Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026

 

The Superannuation (Productivity Benefit) Act 1988 (PB Act) provides superannuation arrangements for certain Australian Government employees, office holders and contractors (employees) that broadly align with the minimum employer superannuation requirements in the Superannuation Guarantee (Administration) Act 1992 (SGAA).

The superannuation arrangements under the PB Act were closed to new employees from 1 July 2006. The arrangements continue to apply to persons who were covered by the PB Act on 30 June 2006 until they cease relevant employment or become a member of an Australian Government superannuation scheme, such as the Public Sector Superannuation Accumulation Plan.  

For the purposes of section 3C of the PB Act, the Schedule to the Act contains a table establishing the amount of employer contributions, termed ‘continuing contributions’, that must be paid in respect of a fund employee each pay period. Section 3D of the PB Act provides that amounts specified in the table in the Schedule to the Act can be updated by declaration made by the Minister. The Superannuation (Productivity Benefit) (Continuing Contributions) Declaration 2013 (the Principal Declaration) is made for these purposes.

The Principal Declaration broadly aligns the continuing contribution rate to the minimum employer contributions necessary to avoid incurring the superannuation guarantee charge under the SGAA. It also includes a contribution ‘floor’ to provide minimum contributions for income under a certain level.

To this end, the table in subsection 3(1) of the Principal Declaration, which sets the calculation method for determining these continuing contribution amounts, incorporates two SGAA provisions, being:

-          the relevant charge percentage for the relevant financial year (subsection 19(2)); and

-          the ‘maximum contribution base’ for the relevant quarter (section 15).

Amendment Declaration

On 1 July 2026, amendments made to the SGAA by the Treasury Laws Amendment (Payday Superannuation) Act 2025 will commence. These amendments amend the manner in which minimum contributions are calculated under the SGAA and make changes to the provisions referenced in the Principal Declaration. In particular, from this date:

-          the maximum contribution base, renamed ‘maximum contributions base’, will move from a quarterly base amount to an annual base amount, and will operate as a direct limit on contributions rather than on ordinary time earnings (OTE);

-          contribution obligations will apply to employers by reference to an employee’s ‘qualifying earnings’ on a ‘QE day’ rather than on OTE in a quarter, and

-          the variable ‘charge percentage’ previously specified by reference to particular financial years will be fixed at 12%.

The Amendment Declaration makes consequential amendments to recognise these changes. Following the amendments the method for calculating employer contributions under the Principal Instrument will be aligned with the SGAA employer contribution requirements.

The Amendment Declaration maintains the minimum weekly contribution amount at $13.53 for persons with a weekly superannuation salary of $112.75 or less on a pay period, which is the rate that applied immediately before the instrument was made. This is to ensure that the minimum superannuation contribution amount provided under the Principal Declaration, which exceeds the SGAA minimum contribution requirements, continues in operation.

Legislation Act 2003
 

The Amendment Instrument and the Principal Instrument are not subject to sunsetting because section 11 of the Legislation (Exemptions and Other Matters) Regulation 2015 specifies, via item 6 of the table in that section, ‘an instrument (other than a regulation) relating to superannuation’ to be a class of legislative instrument that is not subject to sunsetting under Part 4 of Chapter 3 of the Legislation Act 2003. The exemption was put in place because it was considered that sunsetting of instruments relating to superannuation could cause commercial uncertainty, as well as uncertainty for superannuation fund members and providers. These instruments are intended to have enduring operation, and it would not be appropriate to subject them to sunsetting.

 

The Declaration is a legislative instrument for the purposes of the Legislation Act 2003 (Legislation Act). Although section 44 of the Legislation Act exempts superannuation instruments from disallowance, the Declaration is subject to disallowance in accordance with section 9B of the PB Act.

The details of the Declaration are explained in Attachment A. 

Consultation

No consultation was considered necessary because the instrument is of a minor or machinery nature and does not detrimentally alter existing arrangements and entitlements. 

Commencement

The Amendment Declaration commences on 1 July 2026.

Statement of Compatibility with Human Rights

A Statement of Compatibility with Human Rights is at Attachment B.

 


Attachment A

Superannuation (PRODUCTIVITY BENEFIT) (CONTINUING CONTRIBUTIONS) Amendment (PAYDAY SuperANNUATION) Declaration 2026

Section 1 – Name of Declaration

This section provides that the name of this Declaration is the Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026.

Section 2 – Commencement

This section provides for this Declaration to commence on 1 July 2026.

Section 3 – Authority

This section provides that the authority for the Declaration is section 3D of the PB Act.

 

Section 4 – Amendment of Superannuation (Productivity Benefit) (Continuing Contributions) Declaration 2013

This section provides that Schedule 1 of this Declaration amends the Superannuation (Productivity Benefit) (Continuing Contributions) Declaration 2013 (the Principal Declaration).

Section 5 – Application of amendments in Schedule 1

This section provides for the application of amendments made by Schedule 1. Section 5(1) provides that the amendments made by this Declaration commence in respect of pay periods ending on or after 1 July 2026.

Section 5(2) provides that the amendments made by Schedule 1 do not repeal or alter the application of the Principal Instrument as in force immediately before 1 July 2026 for pay periods that ended before 1 July 2026.

Schedule 1 – Amendments

Item 1 omits “1 July 2014” as the date of the first financial year from which the Table has effect, and replaces it with “1 July 2026”. 

Item 2 omits the table in subsection 3(1) and inserts the new table establishing continuing contributions requirements from financial years beginning on or after 1 July 2026.

Item 3 omits subsection 3(2) which sets out definitions that were used in the table, which are no longer required.

The effect of the new table is to maintain the existing minimum contribution floor, while aligning other contribution requirements with contribution requirements under the Superannuation Guarantee (Administration) Act 1992 (SGAA) from 1 July 2026. Relevantly, from this date, the SGAA terms used in the existing table in subsection 3(1) will change in meaning.

-         The previous table specified salary thresholds, and the required contribution percentage, by reference in part to the ‘charge percentage’ under subsection 19(2) of the SGAA. This provision is repealed from 1 July 2026 and instead the charge percentage by which minimum contributions are calculated is 12 % (subsection 17A(2)).

-          The previous table also specified maximum continuing contributions by reference to the charge percentage multiplied by the weekly equivalent of the quarterly ‘maximum contribution base’ under section 15 of the SGAA. This provision is repealed from 1 July 2026 and instead the new ‘maximum contributions base’ (MCB) will operate as a cap on annual contributions (section 10A(6)).

The new table will take into account these changes while broadly preserving the same outcomes for relevant employees as under the existing arrangements.

Minimum contributions for low income earners

Under the new table, for each pay period, where a fund employee’s weekly rate of salary is less than $112.75, the weekly continuing contribution amount that the employer must pay for that period is $13.53. This is the same rate as under the existing table, but expressed as a numerical salary rate rather than by reference to the charge percentage under the SGAA.

Fixing this weekly rate of salary threshold at $112.75 ensures that the contribution rate provided to lower paid wage earners is maintained in keeping with the rate provided immediately before the commencement of this Declaration. The effective rate of the contribution amount is higher than the 12 percent contribution (‘charge percentage’) required by the SGAA.

Contributions for other employees

For fund employees (employees) whose weekly rate of salary is $112.75 or more, the table provides for the weekly continuing contribution for the relevant pay period to be calculated in accordance with the minimum employer contribution requirements under the SGAA from 1 July 2026.

From this date, the SGAA provides that on a ‘QE day’ (defined under the SGAA as the day on which an employer pays an employee their superannuable earnings), employers must pay superannuation contributions equal to the ‘individual superannuation guarantee amount’ to avoid a superannuation guarantee shortfall. A superannuation guarantee charge is payable on an employer’s superannuation guarantee shortfall.

The ‘individual superannuation guarantee amount’ as defined under the SGAA is the amount of superannuable earnings (‘qualifying earnings’) of an employee for the relevant pay period multiplied by the charge percentage (12%).

Where an employee’s cumulative earnings reach the MCB for that employer in a relevant year, the amount of qualifying earnings is treated as being reduced (including to nil) for the purpose of determining the ‘individual superannuation guarantee amount’ under the SGAA. Continuing contributions under the PB Act will consequently also be reduced to nil once the employee’s qualifying earnings have reached the MCB for the year.


ATTACHMENT B

Statement of Compatibility with Human Rights
 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026


This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Superannuation (Productivity Benefit) Act 1988 (the PB Act) provides superannuation arrangements, based on the minimum employer superannuation requirements in the Superannuation Guarantee (Administration) Act 1992 (SGAA), for certain Australian Government employees, office holders and contractors.

 

The purpose of Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026, made under section 3D of the PB Act, is to update the method for calculating continuing contributions set out in Superannuation (Productivity Benefit) (Continuing Contributions) Declaration 2013 in relation to financial years commencing from 1 July 2026.  These changes will ensure that employer contributions provided by the PB Act continue to align with employer contribution requirements under the SGAA.

Human Rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Senator the Hon Katy Gallagher, Minister for Finance

 

 

Overview

The Superannuation (Productivity Benefit) Act 1988 was enacted to establish a superannuation scheme for certain Australian Government employees, office holders, and contractors, aligning it with the minimum employer superannuation requirements under the Superannuation Guarantee (Administration) Act 1992. The Act was introduced to address the need for a superannuation arrangement that provides benefits similar to those mandated by the SGAA, ensuring that these public sector employees receive adequate retirement savings. The Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026, made under the authority of section 3D of the PB Act by the Minister for Finance, updates the method for calculating continuing contributions in response to amendments in the SGAA effective from 1 July 2026. The policy objective of this amendment is to maintain the alignment of the superannuation contributions under the PB Act with the updated employer contribution requirements under the SGAA, thereby ensuring consistency and predictability in superannuation contributions for the affected employees. This amendment aims to update the superannuation contribution calculation methodology to reflect changes in the SGAA, such as the shift from quarterly to annual maximum contributions base, the application of contributions based on qualifying earnings rather than ordinary time earnings, and the fixing of the charge percentage at 12%. The amendment maintains the minimum weekly contribution amount for lower-paid employees at $13.53 for weekly superannuation salaries of $112.75 or less, ensuring that the minimum superannuation contribution provided under the PB Act exceeds the SGAA requirements. The Declaration, which is subject to disallowance and not subject to sunsetting, is intended to have enduring operation to avoid commercial and operational uncertainty for superannuation fund members and providers.

Scope and Application

The Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026 applies to Australian Government employees, office holders, and contractors who were covered by the Superannuation (Productivity Benefit) Act 1988 (PB Act) as of 30 June 2006. This includes individuals who were already participating in the superannuation arrangements under the PB Act prior to the Act's closure to new employees on 1 July 2006. The Declaration updates the method for calculating employer contributions from 1 July 2026 to align with the changes in the Superannuation Guarantee (Administration) Act 1992 (SGAA) made by the Treasury Laws Amendment (Payday Superannuation) Act 2025. It applies nationally as it pertains to federal government employees and is effective from 1 July 2026. The Declaration does not apply to employees who joined the superannuation arrangements under the PB Act after its closure date of 1 July 2006. The changes made by the Declaration are not subject to sunsetting and are intended to have enduring operation, ensuring ongoing alignment with the SGAA. The Declaration is subject to disallowance under section 9B of the PB Act, although it is exempt from disallowance under the Legislation Act 2003 for superannuation-related instruments. This Amendment Declaration is a legislative instrument that updates the Principal Declaration to reflect changes in the SGAA, ensuring that the superannuation arrangements under the PB Act continue to comply with the minimum employer contribution requirements as stipulated by the SGAA.

Key Provisions

The Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026, made under section 3D of the Superannuation (Productivity Benefit) Act 1988 (PB Act), updates the method for calculating continuing contributions for financial years commencing from 1 July 2026. This Declaration aligns the superannuation arrangements for certain Australian Government employees, office holders, and contractors with the employer contribution requirements under the Superannuation Guarantee (Administration) Act 1992 (SGAA). The Declaration specifies new rates and thresholds for employer contributions to ensure compliance with the amended contribution calculation methods under the SGAA. The Declaration imposes obligations on employers to ensure they meet the new contribution requirements as of 1 July 2026. Specifically, employers must calculate and remit superannuation contributions in accordance with the new method, which involves applying a fixed charge percentage of 12% to an employee's qualifying earnings on a 'QE day'. Employers are required to maintain records demonstrating compliance with these new contribution obligations, and any changes to the contribution calculation must be applied from the specified commencement date. Failure to comply with the new superannuation contribution requirements set out in the Declaration may result in penalties under the SGAA, as the amendments are designed to align with the employer obligations under that Act. Employers who do not remit the correct amount of superannuation contributions may face penalties, including interest on any underpaid amounts and potential fines. Additionally, there may be civil or criminal consequences for significant or repeated non-compliance, as stipulated by the SGAA. The exact penalties and consequences will depend on the specifics of the non-compliance and the SGAA provisions. The Declaration includes a Statement of Compatibility with Human Rights, prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, indicating that the Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the Act. The Statement concludes that the Declaration does not engage any of the applicable rights or freedoms and is therefore compatible with human rights. The Declaration is also exempt from disallowance under section 44 of the Legislation Act 2003, although it remains subject to disallowance in accordance with section 9B of the PB Act.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.