The super guarantee charge: late super, unpaid super to contractors, and how far back the ATO can go

How late super becomes the SGC

Paying super on time is an ordinary, tax-deductible business cost. The moment a deadline is missed, the law swaps that obligation for something deliberately worse - the superannuation guarantee charge. For quarters up to 30 June 2026, the SGC is made up of:

• The shortfall - calculated on the employee's total salary and wages, not just ordinary time earnings, so it's usually more than the super you originally owed;
• Nominal interest at 10% p.a. - running from the start of the quarter, not the due date;
• An administration fee of $20 per employee, per quarter.

And the sting: under these rules the SGC is not tax-deductible - unlike the super would have been if paid on time. A business that pays super one day late pays more, on a bigger base, with interest backdated, and gets no deduction.

SGC statements and due dates (quarters up to 30 June 2026)

Missing a quarterly deadline triggered a second obligation: lodging an SGC statement with the ATO by one month after the contribution due date - 28 November, 28 February, 28 May and 28 August for the four quarters. Lodging the statement is what tells the ATO about the shortfall and starts a payable SGC assessment.

Many employers never lodged them, either not knowing they existed or hoping to quietly catch up. That choice has consequences beyond penalties - it decides whether directors' personal exposure can ever be undone.

Didn't pay super to contractors, casuals or sole traders? How far back the ATO can go

There is no time limit. Income tax has amendment periods; the super guarantee does not. The ATO can assess the SGC for any quarter since the scheme began in 1992, as far back as the records go. The "7 years" people search for is a record-keeping rule, not a cap on super. In practice most reviews do not start with a random audit. They start when a worker, often a former one, lodges an unpaid super enquiry with the ATO, which then asks you to account for every quarter that worker names, and usually for every other worker on the books over the same period. Background: how far back can the ATO go?

Step 1: work out whether super was actually owed

An ABN, an invoice and the word "contractor" on a piece of paper do not decide this. For super purposes a person is treated as an employee if they are paid wholly or principally for their labour and skills, have to do the work personally (cannot send someone else in their place), and are paid for their time rather than for delivering a result. A tradie or labourer paid by the hour who turns up when told usually fails the contractor test and is owed super, even if they invoice you and run their own ABN. Casuals are included. Workers under 18 are included once they work more than 30 hours in a week. Since 1 July 2022 there has been no monthly earnings threshold, so even small amounts of pay attract super. Run each worker through the ATO's super guarantee eligibility decision tool on ato.gov.au and keep the result; it is the first thing a specialist will ask for.

Step 2: size the problem honestly

For every quarter and every worker, the SGC is worked out on total salary and wages (not just ordinary time earnings), plus nominal interest running from the first day of that quarter, plus the administration fee per worker per quarter, with no tax deduction for any of it. Three years of missed super for four workers is 48 separate shortfalls, each with its own interest clock. The total is almost always larger than the "super I should have paid" figure a business first has in mind. Worked through here: how much is the super guarantee charge?

Step 3: disclose first, or wait to be found?

Disclosing means lodging an SGC statement for each missed quarter before the ATO contacts you. That has three concrete effects: the Part 7 penalty for failing to lodge (up to 200% of the SGC) is generally reduced substantially for a voluntary disclosure, the ATO will consider a payment plan for the total, and you control the timing. Waiting means the first contact is a worker complaint or an audit, and the full penalty is on the table. For a company there is a second problem: the SGC statement deadline for each old quarter has already passed, so the director penalty for those quarters is already lockdown. A director penalty notice then makes the director personally liable, liquidation does not remove it, and only payment clears it. Disclosure does not undo lockdown, but paying the SGC under an agreed plan does clear it over time. More: am I personally liable for unpaid super?

Rebuilding old payroll records

You do not need perfect records to lodge. Bank statements, contractor invoices, timesheets, job sheets, old payroll or accounting software exports and STP reports are enough to reconstruct quarterly pay for each worker. SGC is paid to the ATO, which passes it on to each worker's fund, so you are not stuck chasing former workers for fund details before you can act. Where a figure is genuinely unknowable, a reasonable documented estimate beats not lodging at all.

Going forward

From 1 July 2026 payday super applies to contractors who count as employees for super purposes too: contributions must reach their fund within 7 business days of each payment, and the ATO sees the gap through STP and fund reporting. Fixing the old quarters without fixing the pay run just restarts the problem. See what payday super changes.

When to get help rather than do it alone

Get a specialist involved if it is more than one or two quarters, more than a couple of workers, a company structure (because of lockdown director penalties), or a worker has already gone to the ATO. In any of those cases the order you do things in affects penalties and personal liability, and someone who lodges SGC statements and negotiates payment plans regularly will usually get a better outcome than a first-time disclosure done alone. If you are a tradie, see also tradies with ATO debt.

No grace period: why super debt locks down automatically

For BAS debts like PAYG withholding and GST, directors get a 3-month lodgment window that keeps a future director penalty notice in remittable, "non-lockdown" territory. Super has no such window. If the SGC statement wasn't lodged by its due date, the director penalty for that quarter is lockdown from day one: appointing an administrator, restructuring practitioner or liquidator does nothing - only payment in full removes the personal liability. The full comparison: lockdown vs non-lockdown DPNs.

This is why insolvency specialists almost always triage super debt first, even when it's the smallest number on the list.

Payday super: the rules changed on 1 July 2026

The payday super legislation received royal assent in November 2025 and started on 1 July 2026. For wages paid from that date:

• Super is due every payday. Contributions must arrive in the employee's fund within 7 business days of payment (with limited exceptions, such as new starters). The old quarterly due dates are gone.
• The SGC has been redesigned. There are no more quarterly SGC statements - the ATO assesses the new SG charge itself, using Single Touch Payroll and fund data. The charge comprises the outstanding shortfall (now based on qualifying earnings), notional earnings compounding daily at the general interest charge rate, and an administrative uplift of up to 60% of the shortfall - reduced if you voluntarily disclose before the ATO comes to you.
• The new charge is tax-deductible - a genuine improvement on the old regime - but late-payment penalties (25% of unpaid SGC, rising to 50% for repeat cases) and interest on unpaid charge amounts are not.
• Detection is near-immediate. With every payday reported through STP and funds reporting contributions received, a missed super payment is visible to the ATO within days.

Director penalty exposure for unpaid super continues under the new system. The practical takeaway: super non-payment used to surface quarterly; now it surfaces per pay run, with an automatic charge attached.

Why super should usually be paid first

When there isn't enough cash for every ATO debt, the order matters, and super generally goes to the front of the queue:

1. It's the only debt with automatic lockdown exposure - no lodgment window protects directors, and the liability survives liquidation of the company.
2. It grows uglier than other debts - interest from the start of the quarter, admin costs, penalties of up to 200% of the SGC in bad cases, and (for old quarters) no deduction for any of it.
3. Unpaid super blocks the exits. Eligibility for small business restructuring - the main tool for compromising ATO debt while trading on - requires employee entitlements including super to be paid. Super debt left too long can close off the very option that would have solved the rest.

Payment plans are possible for SGC (see ATO payment plans), but they don't remove director penalty exposure, and interest keeps running. If super debt is one strand of a bigger problem, start with what's my situation? or the wider guide to what happens when you can't pay.