The short answer
The super guarantee charge (SGC) is what an employer owes the ATO when it doesn't pay an employee's minimum super in full, on time and to the right fund. Payday Super changed the rules from 1 July 2026. Super must now be received by the employee's fund within seven business days after each payday, calculated at 12% of qualifying earnings (ATO). If it isn't, the ATO assesses the charge itself and the employer no longer lodges an SGC statement. The charge has four parts: the unpaid super, notional earnings at the general interest charge rate, an administrative uplift of up to 60%, and a choice loading for using the wrong fund. It's due on the day it's assessed. If it's still unpaid after a Notice to Pay, a late payment penalty of 25% or 50% applies, and that penalty can't be remitted. SGC for paydays from 1 July 2026 is tax-deductible. The interest and penalties aren't.
Key points
- From 1 July 2026, super must reach the fund within 7 business days after each payday.
- The ATO now assesses the SGC, which includes interest and an administrative uplift of up to 60%.
- Unpaid SGC can lead to a 25% or 50% late payment penalty that can't be remitted.
What is the super guarantee charge?
Employers must pay a minimum amount of super, the super guarantee, for eligible employees. When that doesn't happen in full, on time and to the right fund, the employer becomes liable for the super guarantee charge. The charge is always more than the super that should have been paid, which is the point: it compensates employees and discourages late payment. The ATO passes the super component on to the employee's fund.
What changed on 1 July 2026?
| Feature | Quarterly rules (earnings paid to 30 June 2026) | Payday Super (earnings paid from 1 July 2026) |
|---|---|---|
| Deadline | 28 days after the end of each quarter | Received by the fund within 7 business days after payday |
| Calculated on | 12% of ordinary time earnings | 12% of qualifying earnings |
| Who works out the SGC | The employer, by lodging an SGC statement | The ATO, by issuing an assessment |
| Interest component | 10% a year nominal interest | Notional earnings at the GIC rate, compounding daily |
| Admin component | $20 per employee per quarter | Administrative uplift of up to 60% |
| Tax deductible? | No | Yes, but not the interest or penalties on it |
| Penalties | Up to 200% of the SGC, remissible | 25% or 50% of unpaid SGC, not remissible |
The Small Business Superannuation Clearing House closed on 30 June 2026, so employers who relied on it need another way to pay.
How is the SGC calculated now?
For each payday, called a QE day, the ATO works out four components:
- The final super guarantee shortfall: the super still unpaid for each employee after counting on-time and late contributions made before the assessment.
- Notional earnings: interest on the unpaid super, at the general interest charge rate.
- The administrative uplift: up to 60% of the shortfall plus notional earnings. It can be reduced if the ATO hasn't had to act against you before and if you lodge a voluntary disclosure.
- Choice loading: an extra amount if super was paid to the wrong fund under the choice of fund rules.
Here's how quickly it adds up. Suppose a business pays $10,000 of qualifying earnings across its staff on one payday, so $1,200 of super is due. If none of it is paid and the ATO assesses the charge with the maximum uplift, the business owes the $1,200 plus notional earnings, plus up to 60% of that total on top. Paying the $1,200 to the funds late, but before the assessment, shrinks the shortfall to nil and leaves only the much smaller interest and uplift on the late period.
How do you reduce the charge if you've missed a payment?
- Pay the fund as soon as you can. Contributions received before the ATO assesses you reduce the shortfall, even if they're late or partial.
- Consider a voluntary disclosure statement before any assessment arrives. It can reduce the administrative uplift.
- Keep records of what went wrong and how you fixed it.
How is the ATO handling the first year?
For paydays from 1 July 2026 to 30 June 2027, the ATO has said it will look at behaviour, not just the mistake, under PCG 2026/1. Employers trying to pay each payday who fix errors quickly are treated as low risk and won't be reviewed. Employers who correct unpaid super within 28 days after the end of the quarter are medium risk. Those who leave super unpaid beyond that point are high risk and the focus of compliance action.
When is the SGC due, and what if it isn't paid?
- The SGC is due on the day the ATO makes the assessment, usually the day you receive it. GIC accrues on any unpaid amount.
- If it's unpaid 28 days after the assessment, the ATO issues a Notice to Pay.
- If it's still unpaid 28 days after you receive the Notice to Pay, a late payment penalty applies: 25% of the outstanding SGC, or 50% if you've had the same penalty in the previous 24 months.
The late payment penalty can't be remitted, and entering a payment plan doesn't stop it. Unpaid SGC is also one of the amounts covered by the director penalty regime, so company directors can become personally liable.
Is the super guarantee charge tax-deductible?
For paydays from 1 July 2026, yes: the SGC itself can be claimed as a deduction. You can't deduct the general interest charge on unpaid SGC, the late payment penalty, or any SGC from the quarterly system before Payday Super.
What about super owed from before 1 July 2026?
Earnings paid up to 30 June 2026 stay under the quarterly rules. If super for those quarters wasn't paid on time, the employer must lodge an SGC statement and pay the charge, made up of the shortfall, 10% nominal interest and a $20 per employee per quarter administration fee. The April to June 2026 quarter's SGC statement and payment were due by 28 August 2026. That SGC isn't deductible.
How can a business fund an SGC debt?
The cheapest fix is to pay the funds before an assessment arrives. If a business can't, the options are an ATO payment plan once the SGC is assessed, which won't stop late payment penalties, or a loan that clears the super or the SGC in full. A short short-term loan or a caveat loan can move quickly when a Notice to Pay deadline is close. Because super now falls due every payday, it's also worth checking the business's ongoing cash flow, and our guide to PAYG withholding debts covers the related risk on the tax side of each pay run.
Sources
General information only. It doesn't take your circumstances into account and isn't tax, legal or financial advice. Speak to your accountant or a lawyer about your situation.
