Can SGC interest and penalties be remitted?
Short answer
Partly. The 10% nominal interest and the $20 administration fee inside the super guarantee charge are fixed by law and cannot be remitted, but the Part 7 penalty of up to 200% and any general interest charge on the unpaid SGC can be. Under payday super the uplift can be reduced to zero, but the late payment penalty cannot be remitted. See the super guarantee charge guide for the full picture.
What can and cannot be remitted
| Amount | Applies to | Can the ATO remit it? |
|---|---|---|
| Nominal interest (10% p.a.) | Quarters to 30 June 2026 | No. It is part of the charge itself. |
| Administration fee ($20 per employee per quarter) | Quarters to 30 June 2026 | No. |
| Part 7 penalty (up to 200% of the SGC) | Quarters to 30 June 2026 | Yes, in part or in full. |
| General interest charge on unpaid SGC | Both regimes | Yes, but only in exceptional circumstances. |
| Administrative uplift (up to 60%) | Pay days from 1 July 2026 | Reduced automatically for a clean history and a prompt voluntary disclosure, down to nil. |
| Late payment penalty (25%, or 50% for a repeat) | Pay days from 1 July 2026 | No. It cannot be remitted, other than under an exceptional circumstance determination. |
The practical point is that the core charge is not negotiable. Most of the money you can save sits in the Part 7 penalty for older quarters and in the uplift for newer pay periods.
How the ATO decides Part 7 penalty remission
The Part 7 penalty is imposed when an SGC statement is lodged late or not at all. The ATO's own practice statement starts at 200% and works down through four steps:
- Late contributions. Did you pay the super to the fund, even late? The sooner you did, the more comes off.
- Coming forward. Did you lodge the statement before the ATO contacted you? Voluntary disclosure before any ATO contact attracts the largest reduction. A default assessment after an audit attracts the least.
- Compliance history. A clean record on super and tax lodgements improves the result. Repeated late lodgements, earlier audits that found shortfalls, or signs of phoenix activity make it worse.
- Other circumstances. Serious illness, natural disaster or a genuine system failure can support further remission. Cash flow problems on their own generally do not.
The ATO has said the full 200% is meant for rare, deliberate cases. The important exception is very old quarters: for periods up to 31 March 2018 that could have been disclosed during the 2018 to 2020 super guarantee amnesty, the ATO will not usually remit below 100% of the SGC unless you came forward before it contacted you or exceptional circumstances stopped you lodging.
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GIC, the uplift, and how to ask
General interest charge on an unpaid SGC follows the same rules as GIC on any other tax debt. You can request GIC remission, but the ATO applies a high bar, and GIC incurred since 1 July 2025 is no longer deductible, so it is worth asking rather than assuming.
For pay days from 1 July 2026, remission is largely built in rather than requested. The administrative uplift starts at 60% of the shortfall and notional earnings, comes down by 20 percentage points if you have had no ATO initiated SGC assessment in the previous 2 years, and by up to 40 percentage points if you lodge a voluntary disclosure statement within 30 days of the pay day. Both together take it to nil. Once the ATO has assessed you, the disclosure window is closed.
To ask for remission on an older quarter, put the request in writing through Online services for business or your tax agent, set out the four factors above with dates and evidence, and lodge any outstanding statements first. A penalty remission request that arrives alongside a payment plan proposal is usually taken more seriously than one on its own. If the ATO refuses, you can object to a Part 7 penalty decision, though you cannot object to GIC itself.
What to do next
- Separate the charge into its parts so you know which amounts are fixed and which are worth arguing about.
- Lodge any outstanding SGC statements before you ask for anything, because remission is far more generous when you came forward first.
- Write a short remission request covering late payments made, when you disclosed, your compliance history and any exceptional circumstances, with evidence attached.
- For a pay day from 1 July 2026, lodge a voluntary disclosure within 30 days to bring the uplift down before the ATO assesses.
Related questions
Can I object if the ATO refuses to remit a Part 7 penalty?
Yes. A decision not to remit the Part 7 penalty (additional SGC) can be objected to, and then reviewed by the Administrative Review Tribunal if needed. GIC is different: you cannot object to GIC, only ask for remission. Check the time limits on the ATO's decision letter and get advice if the amount is significant.
Does a payment plan reduce SGC interest or penalties?
No. An ATO payment plan spreads the payments but does not reduce nominal interest, the administration fee or the Part 7 penalty, and GIC keeps accruing on the balance unless it is separately remitted. It can, however, support a remission request by showing you are engaging, and it protects you from firmer recovery action while you keep to it.
Can I be made personally liable for the company's unpaid SGC?
Yes. Unpaid super guarantee charge is one of the debts the ATO can pursue a director for personally through a director penalty notice. If the SGC statement was lodged late, the penalty is locked down, which means it can only be cleared by paying the debt. Lodging statements on time, even when the company cannot pay, keeps more options open and is one more reason to lodge before you ask for remission. If a director penalty notice has already arrived, the dates on it matter, so get advice quickly rather than waiting on the remission request.
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