Introduction

As the new financial year approaches, there are several significant legal and regulatory changes that will come into effect from 1 July 2026.

These changes will impact employers, professional service providers and business owners across a range of industries.

This article outlines the key legal reforms set to take effect and what steps businesses need to take to prepare for the new compliance obligations.

Payday Super Commences

One of the most significant changes for employers taking effect from 1 July 2026 is the introduction of payday super.

From 1 July 2026, employers will generally be required to pay superannuation guarantee contributions at the same time that they pay an employee’s wages.

While some employers may already be doing this, this framework replaces the current requirement under which superannuation guarantee contributions must be made at least quarterly.

The change has been introduced to reduce the amount of unpaid superannuation and provide greater visibility over employee superannuation payments.

For employers, the change will require them adjustments to payroll practices and processes and may require different cash flow management.

Leading up to 1 July 2026, employers should:

• Review payroll software and systems;
• Ensure payroll and superannuation processes are integrated;
• Budget for more frequent super payments; and
• Update internal payroll procedures and controls.

Employer should consult with their accountant or bookkeeper to ensure they are prepared for this change.

Paid Parental Leave Expands

The Paid Parental Leave scheme introduced by the Federal Government will enter its final expansion phase on 1 July 2026.

This expansion will apply to all children born or adopted on or after 1 July 2026 and eligible families will be entitled to 130 days (26 weeks) of government-funded Paid Parental Leave.

This is an increase from the current allowance of 120 days (24 weeks).

In anticipation of this change, employers should:

• Review parental leave policies;
• Review employee handbooks;
• Update onboarding and HR documentation; and
• Review workforce planning arrangements.

While the entitlement is government-funded and does not generally require businesses to make direct payments, businesses should still ensure that their internal policies and procedures accurately reflect the amended scheme.

AML/CTF Tranche 2 Reforms

Australia’s anti-money laundering (AML) and counter-terrorism financing (CTF) regime is expanding to capture a broader range of professional service providers.

From 1 July 2026, certain services including those provided by solicitors, accountants, conveyancers and real estate professionals (among others) will become regulated as “designated services” under the AML/CTF regime.

Businesses that provide designated services may be required to:

• Enrol with AUSTRAC;
• Conduct customer due diligence and verification procedures;
• Implement and maintain AML/CTF compliance programs and procedures;
• Undertake risk assessments;
• Maintain appropriate records; and
• Report suspicious matters, suspicious activity and certain transactions.

For law firms, accounting practices and other newly regulated businesses, this reform imposes substantial compliance obligations that are likely to require significant operational changes.

Businesses that have not yet begun preparing for these changes should urgently assess whether the services they provide fall within the new categories of designated services and seek professional advice, where necessary.

New Privacy Requirements

In addition to the above reforms, there are related privacy obligations that will apply to businesses now captured by the AML/CTF regime.

Entities now regulated under AML/CTF legislation must ensure that they carefully manage how identity documents and verification information is collected, stored and retained when complying with AML/CTF requirements.

Businesses should review their privacy policies, document retention procedures and data management practices to ensure they comply with AML/CTF requirements as well as the Australian Privacy Principles and the Privacy Act 1988 (Cth).

Increase to National Minimum Wage

The Fair Work Commission recently announced increases to the National Minimum Wage and modern award wages that will apply from 1 July 2026.

Employers should ensure that, in preparation for this change:

• Employee pay rates are reviewed and updated;
• Payroll systems are updated;
• Confirm that award-covered employees will receive the correct rates under the applicable award; and
• Employment contracts are reviewed to ensure that any references to minimum rates remain compliant.

Failure to pass on the increases to the National Minimum Wage and modern award wages can expose businesses to underpayment claims, compliance investigations and significant financial penalties.

Conclusion

There are several significant changes coming into effect from 1 July 2026 and Australian businesses should be prepared to ensure compliance.

Taking proactive steps to adapt to these changes can help avoid compliance issues, reduce risk and ensure a smooth transition into the new financial year.

Additional resources

Frequently asked questions