The legislation was passed by both Houses on 4 November 2025, and the ATO is now publishing operational guidance while signalling a far more data-driven compliance approach.

What’s changing

• Super moves from quarterly to every pay run (weekly/fortnightly/monthly).
• Super is calculated on 12% of ‘qualifying earnings’ (QE), a new term the ATO is using to bring together ordinary time earnings (OTE) and related concepts for Payday Super.
• Funds must receive the contribution within 7 business days of payday, unless an extended timeframe applies.
• Employers generally have 20 business days to make contributions to a new employee’s fund, or when contributing to a new fund for an existing employee.
• Complex remediation and disclosure requirements for non-compliance and updated penalty regime.

Why hospitality and gaming will feel this first

High-frequency payroll and high variability can cause more ‘near misses’

Weekly pays, late roster approvals, and last-minute adjustments, such as meal breaks, allowances, overtime, and penalty rates, increase the risk of shortfalls and late payments when super must follow every pay event.

Casuals, turnover, and onboarding volume

More starters and leavers mean more stapling/choice workflows, fund changes, and edge cases, now with tighter timeframes and more scrutiny.

Complex multi‑function operating models

Hotels, pubs, clubs, and groups often operate across multiple entities, awards, sites, and payroll files. Payday Super magnifies the impact of:

• incorrect wage code configuration
• split pay cycles (front-of-house vs back-of-house, events, contractors)
• off-cycle runs (terminations, backpay, corrections).

Tips, allowances, loadings, and ‘what counts’

If your payroll wage codes aren’t cleanly mapped to what is (and isn’t) superable under the new QE approach, you could end up with systematic underpayments or overpayments across thousands of micro-transactions.

The ATO is moving toward more data and more targeted compliance

The Australian Taxation Office (ATO) has published a risk-based first-year compliance approach (PCG 2025/D5) that categorises employers as low, medium, or high based on payment behaviour. It also makes clear that the ATO must still apply the law if a shortfall exists, even for employers who otherwise appear ‘low risk’.

You are more likely to hear from the ATO where non‑compliance exists. The compliance approach also reflects a shift toward active, risk‑based employer profiling, separating genuine compliance efforts from those not attempting to comply and cases of serious non‑compliance.

Practical ‘must-do’ focus areas for hospitality and gaming

1) Payroll process testing and clean-up

Confirm, test, or redesign your roster-to-pay workflow to ensure it closes quickly enough to calculate and pay the correct QE and super each payday.

Build a controlled process for employee superannuation data acquisition and superannuation fund payment rejections.

2) Wage code and earnings mapping clean-up

Review every earnings type, including penalty rates, overtime, allowances, leave types, bonuses and incentives, commissions, reimbursements, tips and gratuities, and backpay.

Align your wage code configuration with Single Touch Payroll (STP) and Payday Super reporting and calculation requirements, and don’t wait until June 2026.

Perform high-level or detailed data testing as needed to assess current compliance or identify systematic errors.

3) Pay cycle readiness

Confirm whether your pay cycle can reliably meet ‘received by fund in 7 business day’ at peak periods, as public holidays and weekends are particularly relevant for venues.

Design a process for off-cycle runs so super doesn’t fall through the cracks.

4) Cashflow and working capital planning

Moving from quarterly to per-pay super will cause a shift in cash timing, so model this now across weekly pay cycles and seasonal trading peaks.

5) Shortfall detection and voluntary disclosure capability

Establish a repeatable monthly control to reconcile payroll superannuation liabilities with fund receipts.

Develop a documented workflow to identify shortfalls early, along with a methodology for calculating, preparing, and managing disclosures when required.

6) Decide who owns what

Payroll, finance, HR, venue operations, and system vendors need a single implementation owner and a tested calendar covering configuration, parallel run, control testing, and go-live.

How SW can help

At SW, we help businesses, including those in hospitality and gaming, navigate the new Payday Super changes, helping you stay compliant and reduce risk. We can review your payroll and rostering processes to ensure super contributions are calculated correctly on every pay, even with weekly cycles, casual staff, and variable rosters. We help design workflows that manage off-cycle payments, high staff turnover, and super fund changes efficiently.

Our team can also help you understand the cashflow impact of moving from quarterly to per-pay contributions and implement controls to detect any shortfalls early. We provide advice and support for voluntary disclosures if needed and coordinate across payroll, HR, and finance to make the transition smooth and manageable.

With our expertise, you can be confident that your business is ready for Payday Super and that you can focus on running your operations without unnecessary stress.

The post Payday Super is coming for hospitality & gaming: Are your payroll and rostering systems ready for 1 July 2026? appeared first on SW Accountants & Advisors.

While the application of the exemption has not changed, Taxation Ruling 2022/2 does provide further clarifications and references the Word Investments High Court case. This ruling replaces Taxation Ruling 97/22, which has now been withdrawn.

TR 2022/2 relates to the exemption of not-for-profit clubs from income tax. The games and sports exemption is applicable to a club (including societies and associations) where it:

• is founded for the primary goal to promote a sport or game
• does not have a profit motive for its individual members
• meets other special conditions under section 50-70 (including, is not carried on for profit or gain of its individual members)

What is included as a ‘sport’ or ‘game’?

TR 2022/2 clarifies that the terms ‘game’ and ‘sport’ also encompasses nonathletic activities such as chess or bridge, activities which involve machines to take part such as motor racing, and non-competitive activities such as mountaineering.

A requirement to qualify as a game or sport for the exemption include key features that it typically has rules, expectations and conventions. Competition is also another general feature of a game or sport, however this is not essential.

When determining if a club qualifies for the exemption, it is important to consider the club’s primary purpose. To be eligible, the club’s main purpose must be the encouragement of a game or sport. Where another purpose, such as the encouragement of sociability, participation and relaxation dominates the promotion of the sport or game, this would not meet the criteria of a sport or game.

Commercial activities and purpose

Clubs that engage in commercial activities to earn revenue are required to objectively establish the degree to which commercial activities are a means to the required primary purpose of encouragement of a game or sport.

A club is able to establish a purpose of supporting a game or sport where it provides financial and in-kind contributions to other organisations that directly carry out those activities.

Examples of direct or indirect activities that show the promotion of a game or sport include:

• organising and conducting tournaments
• improving the abilities of participants
• providing purchased or leased facilities for the activities or the game or sport for the use of club members and visitors, and
• marketing.

It needs to be objectively demonstrated that these activities are conducted as a means to further the main purpose of encouraging the game or sport.

In cases where a club has another purpose outside sporting purposes, it will not meet the games and sports exemption unless the non-sporting purpose is merely in relation to carrying out its sporting business or independent from the sporting purpose but is less significant than the sporting purpose.

To establish whether the club has a primary propose of promoting a game or sport, the circumstances and facts of each case needs to be considered objectively, considering the following factors deemed relevant by courts and tribunals:

• the club’s constituent documents
• extent of sporting activities
• the conduct of activities directly connected to the game or sport
• member participation in the game or sport
• marketing of the organisation to the public as one that encourages a game or sport
• involvement of the committee management in the promotion of sport
• the use of surplus funds for promoting the game or sport, and
• the provision of financial and in-kind support for encouraging the game or sport.

Factors that work against the conclusion that a club’s main purpose is the encouragement of a game of sport, include:

• an emphasis in its constitution to provide a social club for members
• the provision of social facilities for members
• no direct involvement in fielding sporting teams or entering into competitions
• funding of game or sport only on an inconsistent basis with its members taking priority
• the relative size and extent of social facilities provided for the benefit of members compared to the financial and in-kind support provided to sport and games.

Surplus funds

Where clubs accumulate surplus funds, they should have a detailed plan that show how the funds will be used to support the encouragement of sport or game.

Self review form

Clubs with an active Australian Business Number will be required to complete an online self-review form of their eligibility to the income tax exemption each year from 1 July 2023.

How we can help

Whilst it is pleasing that further examples have been provided in this ruling, there is still a significant grey area when determining if the games and sport exemption applies.

This is particularly the case for large clubs with significant commercial activities that have multiple purposes of encouraging a sport or game as well as providing significant benefits to members. Therefore, it is important for club’s objectives to be clearly documented and for any plans to clearly highlight how the club encourages a sport or game.

If you require further advice regarding this tax exemption, please reach out to our SW team.

Contributors

Alice Mulvogue, Assistant Manager, Tax

Sharon Lee, Consultant, Tax

The post ATO Tax Ruling – ‘Games and sports exemption’ TR 2022/2 appeared first on SW Accountants & Advisors.

Within the gaming sector, our expertise spans the areas of independent operational analysis and review, auditing, business continuity planning, debt and equity finance, tax, virtual CFO services and much more.

Working with tourism and hospitality businesses we are well versed in these sectors’ unique needs and have the expertise to help you with accounting, tax and audit advice, risk management, strategic business planning and more.

We recognise the unique challenges our clients face, such as rising operational costs, adapting to the post-COVID environment, and difficulties in sourcing and retaining staff. Our SW team is here to help you capitalise on opportunities by harnessing technological advancements to streamline operations. We also provide accounting and tax compliance services as well as virtual CFO services, bookkeeping, and payroll support to maintain the financial health of your business.

At the forefront of industry trends and issues, our industry group consistently provide valuable resources, including alerts and articles tailored to the hospitality and gaming sectors. Furthermore, we host webinars, events and boardroom lunches that focus on critical changes within the gaming industry, ensuring you remain well-informed and prepared for the future.

Our THG services

Working with some of the most innovative businesses in the gaming, tourism, hotels and hospitality industries, our foundation of knowledge and expertise enables us to provide tailored, sector-specific solutions for your business.

We are well versed in these sectors’ unique needs and have the expertise to help you with:

Industry Associations & Sponsorships

Through our industry networks, we have partnered with the Australian Hotels Association, On Tap Hospitality, Tourism Accommodation Australia Community Clubs Victoria and Queensland Hotels Association.

Being at the forefront of industry issues, we regularly share resources such as alerts, articles and videos to the tourism, hospitality and gaming industry. We also have hosted webinars, events, roundtables and boardroom lunches to discuss the impending changes to the gaming industry.

Australian Hotels Association (AHA) Victoria

Community Clubs Victoria (CCV)

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Tourism Accommodation Australia (TAA) Victoria

Queensland Hotels Association (QHA)

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