What Happens When You Pay Your Super Guarantee Late

Posted 30 Apr '21

What Happens When You Pay Your Super Guarantee Late?

Are you paying your employees superannuation, on time, every time? If not, this will cost you money and will attract the attention of the ATO.

In our last two Business Blog, we went through:

  • What is the Super Guarantee,
  • When is the Super Guarantee payment due and
  • That the Super Guarantee Rate is Set to Rise from July 2021

If you missed these posts, have a read to fill in any blanks.

So what happens when you pay your Super Guarantee late?

The ATO have significantly increased activity around Superannuation. The ATO have this information at their fingertips as all employers must pay superannuation via an electronic superannuation clearing house.

There are significant fines and penalties for not paying your employee’s superannuation on time and not lodging your report. The penalties can stack up the longer it takes to make the payment and lodge the required report. Here’s some of the penalties:

  • Pay the superannuation guarantee charge (SGC). This charge is made up of the superannuation guarantee amount that you have not paid to your employee, plus interest on that amount (currently 10%) and an administration fee.
  • Paying the superannuation guarantee on time to your employee is tax deductible. When paying late, the SGC is not tax deductible, so this will be an additional, even if indirect, cost to your business.
  • When paying the superannuation guarantee on-time, overtime does not attract superannuation. However, if you do not pay the superannuation guarantee on time, overtime becomes eligible for the superannuation guarantee.
  • There may be a penalty for the Director of a company if there is a failure to meet a SGC liability in full by the due date.
  • If you lodge an SGC statement but don’t pay the charge by the due date, you incur an additional general interest charge. This accrues from the date your SGC is due to the date you pay your SGC charge in full.
  • If you pay less SGC than you should because you made a false or misleading statement an administrative penalty can be imposed. This can be up to 75% of the shortfall.
  • Failing to keep adequate records can also invoke a fine.
  • If you lodge your SGC statement late or fail to provide a statement or information when asked for it during an audit, you a liable for a penalty. The maximum penalty is 200% of the SGC.

The list goes on. But we hope you get the point - pay the superannuation guarantee on time, every time and complete the required reporting, or things can get complicated and expensive!

WDF Professional can process super on your behalf, ensuring the right amount is paid on time for a low, fixed fee. Please feel free to get in touch with your WDF Professional contact or phone 02 6921 5444.

Charles Talbot


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