Here’s a guide to what the super guarantee charge is and when employers will have to pay it.
What is the super guarantee charge?
The super guarantee charge applies if an employer doesn’t pay an employee’s super guarantee on time and to the correct fund. The charge is paid to the Australian Taxation Office (ATO) and it is not tax-deductible.
The super guarantee is the minimum amount that employers have to pay into eligible employees’ super accounts. It is currently 9.5% of an employee’s ordinary time earnings (what they earn for their normal hours of work).
How much is the super guarantee charge?
The charge is made up of three parts, the ATO says:
- The amount of super the employee was owed but wasn’t paid (including any penalties for not giving the employee a choice of super fund)
- Interest on that amount (currently 10%)
- An administration fee (currently $20 per employee, per quarter)
Once the charge is paid, the ATO will transfer the super guarantee shortfall amount plus any interest to the employee’s chosen super fund.
When do employers have to pay the super guarantee by?
Employers have to pay eligible employees their super guarantee at least four times a year by the due date. According to the ATO, employers have until 28 days after the end of each quarter to make the super guarantee payment for their employees.
|Due dates for super payments|
|Quarter||Period||Payment due date|
|1||1 July – 30 September||28 October|
|2||1 October – 31 December||28 January|
|3||1 January – 31 March||28 April|
|4||1 April – 30 June||28 July|
If an employer doesn’t pay on time and to the correct fund, they may have to pay the super guarantee charge.
If an employer pays the super guarantee late to their employee’s super fund, the ATO says they may be able to use the late payment offset to reduce the amount of the super guarantee charge. Alternatively, the ATO says an employer may be able to carry forward the late payment so it is used for a future contribution and is tax-deductible.
When do employers need to pay the super guarantee charge?
The super guarantee charge scheme is self-assessed, which means employers must themselves report and correct any missed super contributions. This is done by lodging an ‘SGC statement’ with the ATO by the due date.
Employers need to lodge the SGC statement and pay the charge to the ATO by the following dates:
|Due dates for SGC statement and payment|
|Quarter||Period||SGC statement and charge due date|
|1||1 July – 30 September||28 November|
|2||1 October – 31 December||28 February|
|3||1 January – 31 March||28 May|
|4||1 April – 30 June||28 August|
If the employer doesn’t pay the charge on time, the ATO will apply the general interest charge (GIC) to what is owed until the charge is fully paid.
If the employer thinks they will miss the cut-off date for lodging the SGC statement or paying the charge, they can ask the ATO for an extension. Nominal interest will continue to accrue until they lodge. The GIC will then apply to the deferred date until the charge is paid in full.
Employees can also report their employers for unpaid super and the ATO may then investigate. You can report your employer once their due date for lodging the SGC statement has passed. You can report your employer directly to the ATO on its website.
What happens if an employer doesn’t pay the super guarantee charge?
If an employer doesn’t pay the super guarantee charge, the ATO says it may take actions such as:
- Giving a direction to pay the super guarantee charge within a specified time period. Failure to comply with the direction is a criminal offence and can result in penalties or imprisonment.
- Issuing a ‘director penalty notice’ which makes the director of a company personally liable for the super guarantee charge amount. The ATO may issue a director penalty notice that allows it to start legal proceedings to recover the amount owed.
- Sending a ‘garnishee notice’ to a person or business who holds money for the employer. This requires them to pay any funds owed to the ATO. For individual employers, these notices can be issued to banks, financial institutions and building societies, for example. For businesses, they can be issued to financial institutions, trade debtors and merchant card facility suppliers.
- Legal action to recover outstanding super debts.
You can use the ATO’s super guarantee charge statement and calculator tool to work out the charge and you can also find the SGC statement for employers.
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Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group you selected.
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