Super Guarantee Charge
A penalty imposed on employers who fail to pay the correct SG contributions on time, including the shortfall, interest, and admin fees.
The Super Guarantee Charge (SGC) is a penalty imposed on employers who fail to pay the minimum Superannuation Guarantee (SG) contributions on time. The SGC consists of three components: (1) the SG shortfall amount (the unpaid contributions), (2) interest of 10% per annum on the shortfall from the start of the relevant quarter, and (3) an administration fee of $20 per employee per quarter.
Unlike timely SG contributions, the SGC is calculated on the employee's total salary and wages (not just ordinary time earnings), making the shortfall potentially larger than the original obligation. Additionally, the SGC is not tax-deductible for the employer, whereas normal SG contributions are fully deductible. This makes late payment significantly more expensive than on-time payment.
Employers must lodge a Superannuation Guarantee Charge Statement with the ATO to report any SGC liability. If an employer fails to pay SG and doesn't lodge the statement, the ATO can issue assessments and impose additional penalties of up to 200% of the SGC amount. Employees who believe their employer has not paid the correct super can report it to the ATO, which will investigate and recover the amounts on their behalf.