Super guarantee charge: what happens when you pay super late

Published Tuesday 20 October 2026

Table of contents

• What is the super guarantee charge?
• How is the super guarantee charge calculated?
• SGC due dates and deadlines
• Penalties for not paying the super guarantee charge
• How to lodge a super guarantee charge statement
• How to avoid the super guarantee charge
• Payday super: how SGC is changing from 1 July 2026
• Manage super obligations with Xero
• FAQs on the super guarantee charge

Key takeaways

• The super guarantee charge (SGC) applies when you don't pay an employee's super on time. For earnings paid up to 30 June 2026, it includes the shortfall amount calculated on total salary and wages (not just ordinary time earnings), 10% nominal interest, and a $20 admin fee per employee per quarter. For paydays from 1 July 2026, the ATO assesses a new SGC made up of the shortfall, notional earnings and an administrative uplift of up to 60%.
• The SGC for quarters up to 30 June 2026 isn't tax deductible, which makes late payment more expensive than paying on time. Under payday super, the new SGC is deductible, but the general interest charge and late payment penalties aren't.
• Penalties can escalate quickly. For quarters up to 30 June 2026, the Australian Taxation Office (ATO) can impose Part 7 penalties of up to 200% of the SGC amount. It can also issue director penalty notices and apply general interest charges on top.
• From 1 July 2026, payday super has changed how super works. Super must now reach the employee's fund within seven business days of each payday rather than quarterly, so staying on top of obligations becomes even more important.

What is the super guarantee charge?

The super guarantee charge is a penalty the Australian Taxation Office (ATO) imposes when you don't pay an employee's super guarantee (SG) on time or in full. For earnings paid up to 30 June 2026, it replaces the regular super contribution with a higher, non-deductible charge that covers the original shortfall plus interest and fees.

3 components of the SGC

For earnings paid up to 30 June 2026, the SGC is made up of three separate parts that together determine the total amount you owe.

• The super shortfall amount, calculated on total salary and wages rather than ordinary time earnings (OTE)
• Nominal interest of 10% per annum, calculated from the start of the relevant quarter
• An administration fee of $20 per employee per quarter

How the SGC differs from a regular SG payment

The SGC differs from a regular SG payment in two key ways. First, the shortfall is calculated on salary and wages, not OTE. This is a broader base that typically results in a higher amount.

Second, the SGC isn't tax deductible. Your regular SG contributions are deductible, but once they become an SGC, you lose that benefit entirely.

The current SG rate is 12%, which has applied since 1 July 2025 and continues for 2026–27. From 1 July 2026, SG is calculated on qualifying earnings (QE), which cover OTE plus amounts such as salary sacrificed to super. For quarters up to 30 June 2026, a missed deadline meant the SGC shortfall was calculated on salary and wages instead, which usually meant you owed more than you would've paid on time.

How is the super guarantee charge calculated?

For quarters up to 30 June 2026, calculating the SGC involves working out the shortfall on each employee's salary and wages, then adding nominal interest and the admin fee. Follow these steps to complete the calculation.

1. Identify the employee's total salary and wages for the quarter.
2. Multiply that figure by the applicable SG rate (12% from 1 July 2025) to get the charge amount. Note this is based on salary and wages, not OTE.
3. Subtract any super you did pay for the quarter that reached the employee's fund by the deadline.
4. The difference is the shortfall component of the SGC.
5. Add 10% per annum nominal interest on the shortfall, calculated from the first day of the quarter through to the date you lodge your SGC statement.
6. Add the $20 administration fee for each employee with a shortfall.

Worked example

Consider an employee who earns $20,000 in total salary and wages for the quarter (October to December). Their OTE for the same period is $18,000. You miss the 28 January deadline.

If you had paid on time:

• SG at 12% of $18,000 OTE = $2,160
• Tax deductible, no penalties

Because you paid late (SGC):

• Shortfall: 12% of $20,000 salary and wages = $2,400
• Nominal interest: $2,400 x 10% x 120/365 days (1 October to 28 January) = approximately $79
• Admin fee: $20
• Total SGC: approximately $2,499

That's $339 more than the original $2,160, and none of it is tax deductible. The longer you wait to lodge and pay, the more interest accrues.

SGC due dates and deadlines

Quarterly SG due dates applied only to earnings paid up to 30 June 2026. The last quarterly due date was 28 July 2026, and the SGC statement for that quarter was due 28 August 2026.

Under Payday Super, which started on 1 July 2026, super for wages paid on or after 1 July 2026 must reach your employee's super fund within seven business days of payday. The key word here is "reach": the fund must receive the payment by the due date.

Here are the historical quarterly SG due dates:

• Q2 (1 October to 31 December): 28 January
• Q3 (1 January to 31 March): 28 April
• Q4 (1 April to 30 June): 28 July

If you pay through a clearing house, allow extra processing time. The ATO's Small Business Superannuation Clearing House closed on 1 July 2026.

Allow for your payroll provider's or clearing house's processing time so the contribution reaches the fund on time. Send payments well before the due date.

If you missed a quarterly SG deadline for earnings paid up to 30 June 2026, you must lodge an SGC statement with the ATO, due one month after the original SG due date. Under payday super, you no longer lodge an SGC statement. The ATO assesses the SGC using Single Touch Payroll and fund data, and you can lodge a voluntary disclosure statement before it does.

Penalties for not paying the super guarantee charge

Missing the SG deadline is costly on its own, and failing to lodge and pay the SGC adds further penalties. The ATO has several enforcement tools at its disposal.

Part 7 penalties

For quarters up to 30 June 2026, Part 7 penalties are the most severe consequence. The ATO can impose an additional penalty of up to 200% of the SGC amount. These typically apply when you:

• Fail to lodge an SGC statement by the due date
• Fail to provide information the ATO requests
• Make a false or misleading statement

Director penalty notices

If a company doesn't meet its SGC obligations, the ATO can issue a director penalty notice (DPN) to each director personally. This makes directors personally liable for the unpaid SGC amount plus penalties.

For quarters up to 30 June 2026, if the company fails to lodge its SGC statement within three months of the due date, the ATO can issue a lockdown DPN. Under payday super, the SGC due day for director penalty purposes is the earlier of 60 days after payday or the ATO assessment day. In this case, directors can't discharge the penalty through a company voluntary administration or liquidation. The only option is to pay it personally.

General interest charge

General interest charge (GIC) also applies to any unpaid SGC amounts. The GIC rate is set by the ATO each quarter and compounds daily, adding to the total debt over time.

How to lodge a super guarantee charge statement

If you've missed a quarterly SG deadline for earnings paid up to 30 June 2026, you need to lodge an SGC statement with the ATO. Follow these steps to complete the process.

1. Calculate the SGC for each affected employee. You can use the ATO's official super guarantee charge calculator tool to work out the exact amounts, including interest.
2. Complete the SGC statement form. You'll need to provide details for each employee, including their name, tax file number, salary and wages for the quarter, and the SGC components (shortfall, interest, and admin fee).
3. Lodge the statement with the ATO. You can lodge through the ATO's online services for business, your registered tax agent, or by paper form.
4. Pay the SGC amount to the ATO (not to the employee's super fund). The ATO distributes the super component to each employee's fund on your behalf.
5. Check whether you qualify for a late payment offset. If you paid some super late (after the deadline but before lodging the SGC statement), you may be able to claim an offset to reduce your SGC liability. The offset reduces the shortfall component but doesn't eliminate interest or admin fees.

Lodge and pay as early as possible to minimise interest charges. The nominal interest keeps accruing until the date you lodge your SGC statement.

How to avoid the super guarantee charge

Most SGC situations stem from avoidable mistakes rather than intentional non-compliance. Understanding the common pitfalls helps you stay on the right side of the deadline.

Common mistakes that trigger the SGC include:

• Sending super to the wrong fund details, so the payment doesn't reach the employee's account
• Not allowing enough processing time when paying through a clearing house
• Miscalculating ordinary time earnings and underpaying the SG amount
• Assuming the send date is what matters rather than the date the fund receives the payment
• Missing an eligible employee, such as a contractor who should be treated as an employee for SG purposes

Use the following checklist to help you stay compliant:

• Confirm fund details for every employee when they start and whenever they change funds
• Set reminders for each payday so super reaches funds within seven business days
• Allow for your clearing house's processing time within the seven-business-day window
• Review your payroll setup regularly to make sure qualifying earnings calculations are correct
• Keep records of payment dates and fund confirmations
• Reconcile super payments each pay run to confirm the correct amounts reached the correct funds

Payday super: how SGC is changing from 1 July 2026

Since 1 July 2026, Australia's super system has moved from quarterly to payday frequency under the new payday super rules. This is the biggest change to super guarantee obligations in years, and it affects how the SGC works too.

What is payday super?

Under payday super, you need to pay super at the same time as salary and wages. The contribution must reach the employee's super fund within seven business days of each payday.

How the new SGC works

The SGC framework changes under payday super in several ways:

• The SGC is calculated per payday rather than per quarter
• The SGC is tax deductible for paydays from 1 July 2026
• The general interest charge and late payment penalties remain non-deductible
• An administrative uplift of up to 60% replaces the $20 admin fee, and you can reduce it by lodging a voluntary disclosure
• Notional earnings at the general interest charge rate, compounding daily, replace the 10% nominal interest

How to prepare for payday super

Adjusting your processes for payday super can help you avoid compliance issues later. Consider these steps:

• Review your current payroll software to confirm it supports payday frequency super payments
• Talk to your accountant or bookkeeper about updating your super payment workflows
• Build super payments into your regular pay run process
• Check that your clearing house or super fund can handle more frequent contributions
• Set aside cash flow for more regular super payments instead of quarterly lump sums

Manage super obligations with Xero

Keeping up with super obligations is one of the more stressful parts of running a small business, especially now that payday super has started. Xero's cloud-based accounting and payroll software helps you stay on top of super by building it into your regular pay run workflow.

With Xero's automated payroll, super calculations happen as part of each pay cycle. Xero calculates super based on your employees' earnings and sends contributions to their nominated super funds electronically, which helps reduce errors.

With payday super in effect from 1 July 2026, payroll software that supports the new payment frequency is essential. Explore Xero's payroll features and get one month free.

FAQs on the super guarantee charge

Here are answers to common questions employers have about the super guarantee charge.

Is the SGC tax deductible?

For quarters up to 30 June 2026, the SGC isn't tax deductible. Under payday super, the SGC is deductible, though the general interest charge and late payment penalties aren't.

Can you claim an SGC offset?

Yes. If you paid super late but before lodging your SGC statement, you may be able to claim a late payment offset to reduce the shortfall component. The offset doesn't eliminate interest or administration fees.

What is the nominal interest rate on the SGC?

For quarters up to 30 June 2026, the ATO charges nominal interest at 10% per annum on the SGC shortfall, from the first day of the quarter to the date you lodge your SGC statement. Under payday super, notional earnings at the general interest charge rate, compounding daily, apply instead.

Can the ATO waive the SGC?

The ATO has limited power to remit the SGC in exceptional circumstances. Part 7 penalties may be reduced or remitted if you voluntarily disclose the shortfall and cooperate with the ATO.

What happens if a director doesn't pay the SGC?

The ATO can issue a director penalty notice making each director personally liable. For quarters up to 30 June 2026, if the SGC statement isn't lodged within three months, the director can't discharge the penalty by placing the company into administration or liquidation.