Missing a superannuation guarantee (SG) due date is one of the more costly mistakes an employer can make. Unlike most payroll errors, late super doesn't just incur interest — it triggers a separate tax called the Superannuation Guarantee Charge (SGC), which is non-deductible and calculated on a broader base than ordinary SG. This post covers the mechanics, the lodgement process, and how to record it in the books.
The SG Due Dates
Employers must pay SG contributions to complying funds by the 28th day after each quarter end:
- Q1 (July–September): 28 October
- Q2 (October–December): 28 January
- Q3 (January–March): 28 April
- Q4 (April–June): 28 July
Payment must be received by the fund by the due date — not merely initiated. If a payment is processed on 28 October but the fund receives it on 30 October, it's late. BPay can take 1–2 business days; direct debit timing varies by fund.
The SG rate for 2026–27 is 12%.
What the SGC Actually Is
When SG is paid late, the employer can no longer discharge the obligation through the ordinary SG system. Instead, they must:
- Calculate the SGC and pay it to the ATO (not the employee's fund)
- Lodge an SGC statement (formerly Form NAT 9599)
- The ATO then allocates the amount to the employee's fund
The SGC is not tax-deductible. Regular SG contributions are deductible; SGC is not. This alone makes late payment significantly more expensive.
Calculating the SGC
The SGC has three components:
1. Super Guarantee Shortfall
This is calculated on ordinary time earnings (OTE), but the SGC base is broader — it uses total salary and wages, not just OTE. Commissions, bonuses, and some allowances excluded from OTE for SG purposes are included in the SGC base. This catches employers who under-calculated OTE.
SGC shortfall = SGC rate × salary and wages (for the quarter)
2. Nominal Interest
Interest accrues on the shortfall from the start of the quarter (not the due date) at the rate of 10% per annum. In 2026–27 this remains 10% regardless of RBA movements. Interest compounds daily and is calculated to the date the SGC is paid to the ATO.
For a Q1 shortfall paid in March, interest runs from 1 July — roughly 8 months.
3. Administration Fee
A flat $20 per employee per quarter applies. For a practice with 15 employees across two late quarters, that's $600 in admin fees before a dollar of interest is counted.
Total SGC = shortfall + nominal interest + admin fee
Lodging the SGC Statement
The SGC statement must be lodged with the ATO and the SGC paid. Key points:
- Lodge via the ATO's online portal or through your tax agent
- There is no "amended SG" option — once missed, only SGC applies
- The ATO can remit part of the charge in limited circumstances (genuine administrative error, first offence, prompt voluntary disclosure), but this is discretionary
- Late lodgement of the SGC statement itself incurs failure to lodge penalties
- Directors of companies can be personally liable for unpaid SGC under Part 7 of the SGAA 1992
Recording SGC in the Books
Step 1: Reverse the Original Super Payable
If super was accrued but not yet paid:
DR Super Payable (liability) $X,XXX
CR Cash / Bank $X,XXX
Wait — don't do this if the payment was made late to the fund and returned. If the fund received it late, the payment to the fund still occurred; it just doesn't discharge the SG obligation.
Step 2: Record the SGC Payment to ATO
The SGC is paid to the ATO, not the fund:
DR SGC Expense (non-deductible) $X,XXX
CR Cash / Bank $X,XXX
Many practices use a separate chart of accounts code for non-deductible penalties and charges. The SGC shortfall, interest, and admin fee should all sit in a non-deductible category to ensure the tax effect isn't overclaimed.
Step 3: Fund Allocation
The ATO credits the employee's super fund after receiving SGC payment. No further journal entry is required for the employer — the obligation is discharged via the ATO.
Step 4: Adjust Payroll Tax (if applicable)
SGC payments are excluded from payroll tax in all states and territories. Ordinary SG is also exempt. No payroll tax adjustment is required.
Reconciling in ReconLink
When SGC payments appear in the bank feed, they'll typically show as a payment to "Australian Taxation Office" and may be grouped with other ATO payments if there are multiple obligations in the same period. Tag these transactions with a non-deductible account code and annotate the description clearly — auditors and the ATO both look for clear records of SGC payments. ReconLink's transaction coding engine lets you create a rule for ATO-SGC payments so they're consistently coded across clients.
The Cost Comparison
A $10,000 SG shortfall paid 6 months late costs roughly:
- Shortfall: $10,000
- Nominal interest (10% × 6/12): $500
- Admin fee (say 5 employees): $100
- Total SGC: $10,600
- Plus: the original amount is non-deductible, so the real cost for a company on 25% tax rate is ~$13,250 equivalent pre-tax
Versus paying on time: $10,000 (fully deductible).
Practical Prevention
Most late payments stem from cash flow timing or payroll processing errors, not deliberate avoidance. Practical controls include:
- Pay super fortnightly with payroll rather than quarterly — reduces the cash flow shock and eliminates the quarterly deadline risk
- SuperStream confirmation: confirm receipt with the fund before quarter end
- Bank reconciliation discipline: reconcile super payable accounts monthly so accruals and payments are matched — ReconLink's coding rules can flag unmatched super payable movements
- Calendar reminders for the 21st of the month following quarter end — 7 days buffer before the 28th
The SGC is one of those tax penalties that accountants encounter routinely but clients find genuinely shocking when they receive the bill. Clear communication about the non-deductibility and the broader salary base is essential when advising employers who've slipped on a due date.