Am I personally liable for unpaid super?
Short answer
In most cases, yes. A sole trader or partner is personally liable for unpaid super because there is no company between them and the debt. A company director becomes personally liable through the director penalty rules: the penalty equals the company's unpaid super guarantee charge, arises automatically, and for late-reported quarters locks down so that only payment removes it.
Who is liable, by business structure
| Structure | Who owes the SGC | Personal exposure |
|---|---|---|
| Sole trader | You | Total. It is your debt from day one. |
| Partnership | The partners, jointly and severally | Each partner can be pursued for the whole amount. |
| Company | The company | Each director is liable for an equal director penalty, in parallel with the company. |
| Trust with a corporate trustee | The trustee company | Directors of the trustee company carry the director penalty. |
For sole traders, unpaid super is treated like any other sole trader ATO debt, with one difference: SGC cannot be released on hardship grounds, and nominal interest inside it cannot be waived. The rest of this page is about directors, because that is where people are most often surprised.
How the director penalty works for super
The penalty exists as soon as the company's SGC goes unpaid. The director penalty notice is the ATO's way of collecting it, not the thing that creates it. Once a notice is posted to your ASIC address you have 21 days, counted from the posting date, before the ATO can sue you personally.
What you can do in those 21 days depends on timing:
- Quarters up to 30 June 2026. If the SGC statement was lodged by its due date (one month after the super due date), the penalty is non-lockdown. Paying, or putting the company into voluntary administration, small business restructuring or liquidation within the 21 days, remits it. If the statement was lodged after its due date, or never, the penalty is lockdown: only payment in full removes it. There is no 3 month grace period as there is for BAS.
- Pay days from 1 July 2026. Under payday super the statement is gone and the ATO assesses the charge itself. As the amended rules are currently understood, the penalty stays remissible only if the shortfall was disclosed to the ATO within a short window after the pay day and before the ATO issued its own assessment. Miss that and it locks down. See what payday super changes.
New directors become liable for existing unpaid super 30 days after appointment unless the company pays or enters a formal process in that time. Directors who resign stay liable for super that fell due while they were in office.
Worried unpaid super is about to become yours?
A specialist can check the lockdown position and your options. Free and confidential.
What does not get you off the hook
- A payment plan. The company can pay SGC by instalments, but a plan does not remit a director penalty. If the company misses a payment, the ATO can still come to you.
- Liquidating after day 21, or at any time for a lockdown penalty. The company's debt ends; yours does not.
- Deregistering the company, or letting ASIC strike it off.
- Not knowing. "My bookkeeper handled super" is not a defence. The recognised DPN defences are narrow: illness or another good reason for not taking part in management, having taken all reasonable steps to get the company to pay or enter a formal process, or, for SGC, the company having taken a reasonably arguable position with reasonable care.
LODGE, EVEN IF YOU CANNOT PAY
For any quarter up to June 2026, lodging the SGC statement by its due date is what keeps the penalty remissible. If you have late quarters, read do I need to lodge an SGC statement if I paid late and lodge them now. Late lodgement is worse than late payment.
What to do next
- Work out which quarters or pay days are unpaid, and for each one whether it was reported to the ATO on time.
- Check your ASIC address is current, because a director penalty notice is deemed served when posted there.
- If the company cannot pay, get advice on the lockdown position before choosing between a payment plan, restructuring or liquidation.
- If a notice has already arrived, count 21 days from the date on it and act inside that window.
Related questions
Is unpaid super a personal debt if the company has already been liquidated?
It can be. A lockdown director penalty survives liquidation, and the ATO can issue the notice after the liquidator is appointed. A non-lockdown penalty is remitted only if the liquidation started within 21 days of the notice or before it was issued. Any penalty that had already crystallised stays with you.
Can the ATO take my tax refund for the company's unpaid super?
Yes. Once a director penalty exists the ATO can offset your personal refunds and credits against it without issuing a notice first. It can also garnishee your wages or bank account once the 21 day period on a notice has passed.
Worried unpaid super is about to become yours?
A specialist can check the lockdown position and your options. Free and confidential.
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