1 July 2026
You’ll hopefully never have to deal with the Superannuation Guarantee Charge (SGC). But if you do, it’s important to understand what it means and what you need to do.
As an employer, you must pay the minimum super guarantee (SG) for eligible employees when you pay their salary or wages.
The Superannuation Guarantee Charge (SGC) applies if the fund gets SG too late, you pay too little or pay the wrong fund. You must pay the charge to the ATO, and it’s not tax deductible.
How the SGC works
If super is not received by your employee’s fund within 7 business days of payday, the Superannuation Guarantee Charge (SGC) may apply.
- When it applies: The SGC applies automatically if you pay super late, pay too little, or pay the wrong fund.
- What happens next: You don’t need to lodge a quarterly SGC statement for late payments. The Australian Taxation Office (ATO) uses your Single Touch Payroll (STP) data to calculate the shortfall, interest and administration fee, then issues an assessment.
- If you spot a mistake: If you realise you missed a payment, you can make a voluntary disclosure before the ATO issues an assessment. This may reduce penalties.
- When more time applies: In some cases, employers get more than 7 business days for their super to be received by the super fund. This can apply to having up to 20 business days for the fund to receive a new employee’s first super contribution or if they change their super fund, or when the ATO extends deadlines during events like natural disasters.
How the Australian Taxation Office (ATO) matches super data
The ATO compares the information you report through Single Touch Payroll (STP) with the information super funds report.
For STP to work correctly, your payroll software must use the same ABN and branch number registered with the ATO. If these details don’t match, the ATO may not be able to match your payroll data correctly.
By matching super data, it helps them work out:
- how much super you need to pay
- whether it was paid on time
- whether any payments were missed, late or underpaid
STP data
You must submit an STP report on or before payday. From 1 July 2026, this includes year-to-date qualifying earnings, which the ATO uses to work out the minimum SG amount due and when it must be paid.
Super fund data
When you pay super, the fund reports the payment amount and the date it was received to the ATO.
Make sure your details and your employees’ details are complete, accurate and submitted on time.
Case Study: Sarah’s Retail Boutique1
The scenario:
- Payday: Friday, 10 July 2026.
- Employee gross earnings: $1,000 in Qualifying Earnings (QE).
- The deadline: The super payment must reach the employee's fund by Tuesday, 21 July 2026 (7 business days later).
- The issue: Due to a processing error, the business misses the deadline by 35 days. The ATO calculates the SGC 35 days after the due date passes.
-
Step 1 – Calculate the SG Shortfall
Worked out as 12% of the employee's Qualifying Earnings (QE).
Shortfall=$1,000 x 12%=$120.00
-
Step 2 - Calculate daily compounding interest
The ATO charges General Interest Charge (GIC) from the day after the due date until it works out the shortfall2.
If the interest is charged for 35 days = $1.16.
-
Step 3 - Calculate the administrative uplift
This is up to 60% of the shortfall plus interest (may be lower if the employer tells the ATO about the mistake first).
Administrative uplift = 60% x ($120.00+$1.16) = $72.70
-
Step 4 - Total estimated SGC amount
Super guarantee shortfall + compounding interest + administration uplift
= $120.00 + $1.16 + $72.70
= $193.86
Unlike regular super contributions, the SGC is not tax deductible.
Once the ATO issues an assessment, you must pay the total SGC amount by the due date on the notice. If payment is late, the ATO may apply extra penalties or take legal action.
1. The case study is provided for illustrative purposes only.
2. About Payday Super, Australian Taxation Office, accessed 2 June 2026.
What counts as a business day?
Under Payday Super rules, a business day is any day that’s not:
- Saturday or Sunday
- a public holiday that applies across an entire Australian state or territory.
Example: A Friday pay run is affected by a Monday public holiday.
- Payday: Friday, 2 October.
- Public Holiday: Monday, 5 October
The Result: The payment must reach the fund by Wednesday, 14 October.
Remember to allow for processing times if you use a clearing house or payroll intermediary to pay super.
This is not professional advice. Employers should seek professional advice that meets their own needs and addresses their own obligations and specific circumstances. AustralianSuper doesn’t take responsibility for any action an employer may take as a result of receiving this communication.