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Payday Super starts on 1 July 2026 The information on this page applies to super guarantee payments from 1 July 2026. Some regulations and law for Payday Super are still being considered by Parliament. For progress updates see Payday superannuation legislation. |
What is SGC
If you do not pay the minimum super guarantee (SG) amounts in full and on time for your employees' benefit, or if you don't correctly follow the choice of fund rules, you are liable to pay the super guarantee charge (SGC). We will calculate your SGC and send you a notice of assessment.
Components of the SGC
Under the Payday Super rules, your SGC is calculated and assessed by us for each QE day. The QE day is the day that an employer makes a qualifying earnings (QE) payment to an employee – in other words, payday.
Your SGC is made up of 4 components for the QE day:
- the total of your individual final SG shortfalls
- the sum of all individual notional earnings components
- any administrative uplift amount
- the total of your choice loadings (if any).
Individual final SG shortfall
The individual final SG shortfall for an employee is worked out by determining how much of the individual SG amount still remains outstanding at the time an SGC assessment is made, after applying all on time and late SG contributions.
Individual SG amount
All employers have an individual SG amount for an employee for a particular QE day. This is the minimum amount of SG you must pay for your employee to avoid the SGC. The individual SG amount is calculated by applying the current SG rate of 12% to the amount of qualifying earnings for the QE day.
Example: individual SG amount
Heung-Min pays his employee Stina $1,000 of qualifying earnings (QE) on 4 January 2028 (the QE day). The individual SG amount for this QE day is $120 ($1,000 x 12%).
End of exampleIndividual base SG shortfall
The individual SG amount, less any on-time eligible contributions, gives the individual base SG shortfall. Your individual base SG shortfall will be nil if you make sufficient contributions that are received by the super fund within 7 business days (unless longer applies) of you paying your employee.
Example: contributions made on time
Heung-Min pays $120 to Stina's nominated super fund on 4 January 2028. It was received by the fund on 7 January 2028 (with all the required information to allocate it to Stina's account).
Because the contribution of $120 is received within 7 business days after the QE day of 4 January 2028, the individual base SG shortall for this QE day is $0. That is, the amount of on time contributions is $120.
End of example
Example: late contributions
Heung-Min pays $120 to Stina's nominated super fund on 20 January 2028. It was received by the fund on 25 January 2028 (with all the required information to allocate it to Stina's account).
Because the contribution of $120 is received after 7 business days of the QE day of 4 January 2028, and there are no longer periods that apply, the individual base SG shortfall for this QE day is $120. That is, the individual SG amount not received on time is $120.
End of example
Individual final SG shortfall
If your individual base SG shortfall is greater than nil, deduct any late eligible contributions you have made to determine your individual final SG shortfall amount. Late contributions are eligible contributions received by the super fund more than 7 business days (unless longer applies) after you pay your employee, but before an SGC assessment is made.
The total of all your individual final SG shortfall amounts for a particular QE day is then used to calculate the first component of the SGC for that QE day.
Example: contribution made late, but before an assessment is made
Heung-Min pays $100 to Stina's nominated super fund on 20 January 2028. It was received by the fund on 25 January 2028 (with all the required information to allocate it to Stina's account). The individual base SG shortfall for the QE day (4 January 2028) is $120, being the individual SG amount less any on time eligible contributions.
The ATO makes an assessment on 11 April 2028. After deducting the late eligible contribution to the fund of $100, the individual final SG shortfall for this QE day is $20.
The individual SG amount less any on time and late contributions is $20.
End of exampleNotional earnings
Notional earnings are calculated by multiplying the general interest charge rate and the individual base SG shortfall, compounded daily. This means that the notional earnings for one day is added to the calculation of notional earnings for the next day (until notional earnings stops accruing).
You will start to accrue individual notional earnings for each employee if you have an individual base SG shortfall for that employee. That is, if your individual SG contribution for your employee is not received by the fund within 7 business days after the day you pay your employee (unless longer applies).
Your individual notional earnings stop accruing at the earlier of:
- the day you make a late eligible contribution that reduces your individual final SG shortfall for the employee to nil
- the day the ATO makes an SGC assessment.
Example: Notional earnings
Heung-Min pays $100 to Stina's nominated super fund on 20 January 2028. It was received by the fund on 25 January 2028 (with all the required information to allocate it to Stina's account).
We make the SGC assessment on 11 April 2028. On this day, the individual final SG shortfall for the QE day (4 January 2028) is $20.
Notional earnings start to accrue on 14 January 2028 (the day after the last day to make an on-time contribution).
Notional earnings will stop accruing on the date of the assessment, 11 April 2028. This is because Heung-Min continues to have an individual final SG amount that is greater than nil on that due date.
End of exampleAdministrative uplift amount
You will have an initial administrative uplift amount of 60% of your total individual final SG shortfalls and total individual notional earnings components for a QE day.
The administrative uplift amount may be reduced (including to nil) if regulations allow for it.
Note: At this stage, no regulations have been made. Further information on administrative uplift, including examples, will be available once the regulations become law. Exposure draft regulations were published earlier this year for consultation.
Choice loading
You must follow the choice of fund requirements for your employees, including when you onboard a new employee to avoid a choice loading component being included in the SG shortfall.
The amount of choice loading is 25% of the value of contributions for any QE day where you have not followed the choice of fund rules.
There is a limit of $1,200 that applies to the choice loading for each notice period. A notice period will generally begin on either 1 July 2026 or the end of your previous notice period. It will run until the ATO tells you in writing that it ends. A notice period will usually cover multiple QE days.
If you attempted to pay a contribution to an employee's stapled fund according to information provided to you by us, but the fund will not accept the contribution and you subsequently made the contribution to another fund for the benefit of the employee, you will not have a choice loading.
Assessment of the SGC
Until you get an assessment of SGC, you should pay your late contributions to your employee's super fund.
We will calculate your SGC shortfall and send you a notice of assessment. The assessment is made on the day the notice is served on you.
If you receive an SGC assessment
An amount of SGC is payable on the day we make an assessment of SGC. If you do not pay this amount within 28 days of the date that the assessment is made, we are required to give you a written notice to pay a specified amount of SGC that remains unpaid at that time. This is called a Notice to Pay.
If you still don't pay SGC
If you do not pay the specified amount of SGC in the Notice to Pay within 28 days of the date on the notice, you will become liable to pay a late payment penalty for any amounts that remain unpaid (this is known as the outstanding SGC amount).
The late payment penalty is generally equal to 25% of the outstanding SGC amount. This will increase to 50% of the outstanding SGC amount if you have been liable for the same penalty in the previous 24 months.
This penalty cannot be remitted.
General interest charge
General interest charge accrues on an amount of unpaid SGC, but it does not accrue on an amount of late payment penalty.
SGC and tax deduction
You can claim a tax deduction for an amount of SGC that you pay.
You cannot claim a tax deduction for paying any general interest that accrues on the SGC or the amount of late payment penalty that was imposed for failing to pay the SGC.