The superannuation guarantee (SG) is among the most straightforward of employer obligations — yet it remains one of the most common sources of ATO enforcement action. Late payment, undercalculation on ordinary time earnings, and incorrect treatment of salary sacrifice all feature regularly in ATO audit findings. For bookkeepers managing payroll for any client with employees, SG compliance must be treated as a non-negotiable first-priority item in each quarter's closing checklist.
The 2025-26 SGC Rate
The superannuation guarantee rate for the 2025-26 financial year is 11.5%. This is the rate set by the Superannuation Guarantee (Administration) Act 1992 (SGAA 1992) and the Superannuation Guarantee Charge Act 1992. The rate is scheduled to increase to 12% on 1 July 2026 — the final step in the legislated schedule.
The rate applies to an employee's ordinary time earnings (OTE) — not to total remuneration. The distinction matters:
- OTE includes: base salary, casual loading, shift penalties that are part of ordinary hours, commissions, allowances paid in respect of ordinary hours.
- OTE excludes: overtime payments, reimbursements (not allowances), redundancy payments, workers compensation payments, and non-cash benefits.
A common error is calculating super on total gross pay including overtime. Overtime payments are excluded from OTE — super is calculated only on the base component where an employee works overtime.
Quarter Due Dates
Super contributions must be paid to the employee's nominated fund (or the Small Business Superannuation Clearing House) by:
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | 1 July – 30 September | 28 October |
| Q2 | 1 October – 31 December | 28 January |
| Q3 | 1 January – 31 March | 28 April |
| Q4 | 1 April – 30 June | 28 July |
The due date is the date by which contributions must be received by the fund — not the date of payment initiation. Payment sent on 28 October via BPAY may not clear until 29 or 30 October, triggering an SGC liability. Best practice is to initiate payment at least 3–5 business days before the due date.
The SGC Charge: What Happens When You Pay Late
If super is not paid by the due date, the employer cannot pay the outstanding contribution direct to the fund. Instead, the employer must lodge a Superannuation Guarantee Charge Statement (SGC statement) with the ATO and pay the SGC. The SGC has three components:
- Nominal interest: 10% per annum on the shortfall amount, calculated from the start of the quarter to the date the SGC statement is lodged. This compensates the employee's fund for the delayed investment opportunity.
- Administration charge: $20 per employee per quarter. This charge is not deductible to the employer — a significant difference from the shortfall amount itself, which is deductible when paid as the SGC.
- SGC itself (the shortfall amount): Assessed on salary and wages rather than OTE — the definition is broader, meaning the base for the SGC calculation can be larger than for timely contributions.
The non-deductibility of the administration charge is a detail that surprises many business owners. Paying super one day late can result in a material tax cost in addition to the interest component.
The ATO's Small Business Superannuation Clearing House (SBSCH)
Small businesses (turnover under $10 million or fewer than 19 employees) can use the ATO's SBSCH via myGov or the Business Portal. Contributions paid to the SBSCH are treated as received by the fund on the date the SBSCH accepts the payment — providing the employer meets the due date relative to the SBSCH acceptance date, the obligation is met.
Larger employers and those preferring a commercial clearing house use services such as SuperStream-compliant payroll systems that pay direct to funds. All employer contributions must be SuperStream-compliant — electronic, with an employee tax file number (TFN) and fund USI included in the payment data.
Salary Sacrifice and the SG Interaction
Post-1 January 2020, salary sacrifice contributions made by an employee do not reduce the employer's SG obligation. The SG base (OTE) is calculated on the employee's notional pre-sacrifice earnings — the amount the employee would have received as salary in the absence of the salary sacrifice arrangement.
Example: An employee earns $80,000 per year and salary sacrifices $10,000 into super.
- Pre-reform: the employer calculated SG on $70,000 (post-sacrifice salary), saving $1,150 in super contributions.
- Post-reform (current): the employer must calculate SG on $80,000 (pre-sacrifice). Employer SG contribution: $80,000 × 11.5% = $9,200.
- The salary sacrifice amount is an additional concessional contribution, subject to the annual concessional contributions cap ($30,000 for 2025-26).
Bookkeepers managing payroll for small businesses that set up salary sacrifice arrangements post-2019 must ensure the payroll system is calculating SG on the pre-sacrifice base, not the post-sacrifice salary.
Bookkeeping Entries
Each payroll run (accruing super payable):
DR Superannuation Expense $X
CR Superannuation Payable $X
Quarterly payment to fund:
DR Superannuation Payable $X
CR Bank $X
The super expense is deductible under s.290-150 of the ITAA 1997 in the income year in which it is paid to the fund — not when it is accrued. This means super accrued in June but paid in July is deductible in the following income year. For small business tax planning, paying Q4 super before 30 June (rather than by 28 July) accelerates the deduction into the current year.
SuperStream Compliance and Fund Registration
When an employee nominates a self-managed super fund (SMSF) as their chosen fund, the employer must obtain the SMSF's bank account details and electronic service address (ESA) to make SuperStream-compliant contributions. A common error is making SMSF contributions by cheque or direct deposit without the SuperStream data file — these payments are not compliant and do not satisfy the SG obligation.
Use ReconLink to reconcile super clearing house payment receipts against the payroll ledger each quarter — a 5-minute bank reconciliation check can confirm that all employees have been paid and prevent a late SGC liability.
Legislation and Further Reading
- Superannuation Guarantee (Administration) Act 1992 — SGC rate, OTE definition, due dates
- Superannuation Guarantee Charge Act 1992 — penalties and interest
- Income Tax Assessment Act 1997, s.290-150 — deductibility of super contributions
- ATO — superannuation guarantee employer obligations
- ATO — Small Business Superannuation Clearing House
- ATO — salary sacrifice and the SG (post-1 January 2020 rules)
- ATO — SuperStream for employers