What is the super guarantee charge?

The super guarantee charge is a penalty payable to the Australian Taxation Office (ATO) when an employer fails to pay the correct amount into an employee’s super on time. The amount an employee is required to pay as the SGC is higher than the amount of super that should’ve been paid to the employee’s super account and is not tax deductible. 

Employers are liable to pay SGC if they don’t make employee super contributions on time or they don’t pay the full amount that’s required. They could also be asked to pay SGC if they pay the correct super amount but into the wrong super fund for an employee.

The super guarantee charge employers need to pay to the ATO includes the following:

• Any shortfall of the super guarantee contributions payable by the employer and any choice liability penalty, based on the shortfall and capped at $500.
• Interest of 10 per cent per annum, calculated from the start of the relevant quarter when the super payment was missed.
• An administration fee of $20 per employee per quarter.

To make the SGC payment to the ATO, you need a payment reference number (PRN). You’ll find this PRN on the SGC notice or payment slip you received from the ATO, or if you haven’t received this, you can contact the ATO. 

You can also find the PRN number via the ATO’s online services for businesses or individuals. Or you can request a new PRN by calling 1800 815 886 between 8.00 am and 6.00 pm, Monday to Friday. 

To lodge your super guarantee charge statement, you need to download the excel sheet provided by the ATO on this page to prepare it. You’ll need to calculate the shortfall, and the sheet will help you calculate the interest component of the SGC. You need to create a separate spreadsheet for each quarter and ensure you read the instructions in the spreadsheet carefully. 

Here’s how you can lodge the super guarantee charge statement: 

• Through the link provided in the ATO’s online services for business, which will help you calculate your interest liability and lodge the statement.
• You can complete the SGC statement spreadsheet and lodge it on ATO’s online services for business.
• You could also generate a PDF statement using the super guarantee charge statement and calculator tool. You can then mail a hard copy of this to the ATO. However, this method has more chances of error, and the processing time is also longer. 

Employers typically pay the compulsory super contributions for their employees with every pay cycle. If they don’t do this, they can make payments on the 28th of the month following the end of a financial quarter. Super guarantee charge payments will apply if the employer fails to make these compulsory payments. Employers must lodge the SGC statement and make the payments one month after the due date.

Source: The ATO website

If you fail to meet your SGC liabilities by the due date and don’t discuss an extension with the ATO, they may take stronger action including additional penalties.