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Daily Australia Tax Update: 10 September 2026 : Software Royalty Guidance Open for Consultation, STP Finalisation Deadline & Payday Super Myths Busted

Sep 10, 2026 | Australia Updates

TITLE: Australian Tax and Payroll Checklist: Key Actions for Businesses After 1 July 2026

Australian Tax and Payroll Checklist: Key Actions After 1 July 2026

Australia’s tax and payroll environment has changed significantly since 1 July 2026. Cross-border software payments, Payday Super, Single Touch Payroll, GST reporting and trust tax rules all require attention.

Use this checklist to identify the actions your business should take today.

1. Review offshore software payments before 2 October

The ATO finalised Taxation Ruling TR 2026/2 on 4 September 2026. It explains when payments under software distribution and intermediation arrangements may be treated as royalties for Australian tax purposes.

If a payment is a royalty, Australian royalty withholding tax may apply when you pay an offshore provider. This can affect:

SaaS businesses paying overseas software owners.
Digital agencies using international platforms.
Software resellers and distributors.
App developers and marketplace operators.
E-commerce businesses paying offshore technology or platform providers.
Businesses making payments for software licences, embedded intellectual property or know-how.

The ATO’s view focuses on the substance of the arrangement. A contract calling a party a “distributor” or describing payments as “royalty-free” will not necessarily determine the tax treatment.

You should examine whether your payments relate to:

The right to use copyright or other intellectual property.
The use of software rights.
Access to know-how.
Software embedded in physical products.
Ancillary support connected to intellectual property rights.

The relevant point for withholding tax is generally the date you make the payment. This means you should review current payment processes, not only new contracts.

Assess your risk under PCG 2026/D4

The ATO also released draft Practical Compliance Guideline PCG 2026/D4. It proposes a risk-based framework for software-related royalty payments to non-residents.

Public consultation remains open until 2 October 2026. The draft guideline includes lower-risk zones and indicators of higher-risk arrangements. It also seeks feedback on the risk criteria, residual risk calculations and practical examples.

Action checklist:

List all payments made to offshore software and platform providers.
Separate ordinary access fees from payments that provide rights to use intellectual property.
Review contracts, invoices and payment descriptions.
Check whether a tax treaty changes the withholding outcome.
Keep evidence supporting your treatment.
Escalate uncertain arrangements before making further payments.

Read the ATO’s software royalties ruling and draft guidance and note the consultation deadline.

2. Treat missed June quarter super payments as overdue

The final quarterly Superannuation Guarantee payment for the June 2026 quarter was due to reach employees’ funds by 28 July 2026.

Where an employer missed that date, the shortfall is overdue. Any required Superannuation Guarantee Charge statement and payment were generally due by 28 August 2026.

Do not assume that making a late contribution removes the problem. The late payment offset is no longer available. Employers must address the shortfall and any applicable SGC obligations under the rules applying to the June quarter.

Payday Super myths to avoid

Payday Super applies to paydays from 1 July 2026. Contributions must reach the employee’s fund within 7 business days of payday, unless a specific exception applies.

The ATO has highlighted several common misunderstandings:

Myth: Seven days means calendar days.
The standard period is seven business days. Weekends and national public holidays are excluded.
Myth: Sending the payment is enough.
The contribution must reach the fund with sufficient information for allocation. The date you initiate the payment is not always the date the fund receives it.
Myth: The old quarterly system still applies to new paydays.
Paydays from 1 July 2026 are subject to the Payday Super framework.
Myth: The Small Business Superannuation Clearing House is still available.
The Small Business Superannuation Clearing House closed from 1 July 2026. You need another SuperStream-compliant payment solution.
Myth: The ATO will immediately penalise every transition error.
The ATO has stated that it is prioritising support during the first transition year. That does not remove the obligation to calculate, report and pay super correctly.

Check your payroll software, payment provider and fund data now. A failed payment can create a timing problem even when the original instruction was submitted on time.

The ATO’s Payday Super guidance provides the current employer requirements.

3. Complete STP finalisation for closely held payees by 30 September

Small employers with 19 or fewer employees may have different STP finalisation dates depending on their workforce.

For the 2025–26 income year:

Arm’s-length employees generally required finalisation by 14 July 2026.
Closely held payees generally require finalisation by 30 September 2026 where the business has a mix of arm’s-length and closely held payees.
Small employers with only closely held payees may have a different deadline linked to the payee’s tax return due date.

If your business has both regular employees and closely held payees, review the 30 September deadline now. Closely held payees may include directors, owners or family members paid by a private company.

From 1 July 2026, Payday Super also expands the information required through STP. Each pay run must report qualifying earnings and superannuation liability amounts, alongside wages and PAYG withholding.

Complete these checks: