Overview
If you don't pay the minimum super guarantee amounts for your employees in full and on time, or you don't correctly follow the choice of fund rules, you are liable to pay the super guarantee charge.
The super guarantee charge is the total of any unpaid super, interest and administrative costs. It includes an additional amount if you haven't followed the choice of fund rules.
For paydays from 1 July 2026, you no longer need to lodge a super guarantee statement if you don't pay the minimum super guarantee amounts for your employees in full and on time. We will calculate your super guarantee charge and send you a notice of assessment.
Our compliance approach for 2026–27
In the first year of Payday Super we will take a supportive approach. We will:
- not review employers who are paying their employees' super for each payday and fixing errors quickly
- focus our compliance action on employers who are not trying to make the change to more frequent payments, not fixing errors, or not paying super at all.
Our approach is intended to help employers manage the change while still maintaining the integrity of the superannuation system. For more information see PCG 2026/1 Payday Super - first year ATO compliance approach.
If you make a mistake or forget to pay super on time, the most important thing under Payday Super is to pay the correct amount to the fund as soon as you realise the error (as long as you have not received a notice of assessment from us in relation to the mistake or missed payment).
Components of the super guarantee charge
Under the Payday Super rules, your super guarantee charge is calculated and assessed by us for each QE day. The QE day is the day that an employer makes a qualifying earnings payment to an employee – in other words, payday.
The super guarantee charge is made up of 4 components for a QE day:
- the total of your individual final super guarantee shortfalls (the unpaid super amounts for each employee)
- the total of all individual notional earnings amounts (interest on the unpaid super amounts for each employee)
- an administrative uplift amount (to reflect the cost of enforcement)
- the total of any choice loading (an amount for failing to follow the choice of fund rules).
Individual final super guarantee shortfall
The individual final super guarantee shortfall for an employee is the individual super guarantee amount that still remains outstanding at the time a super guarantee charge assessment is made, after applying all on-time and late super guarantee contributions.
Individual super guarantee amount
All employers have an individual super guarantee amount for an employee for a particular QE day (payday). This is the minimum amount of super guarantee you must pay for your employee to avoid the super guarantee charge. The individual super guarantee amount is calculated by applying the current super guarantee rate of 12% to the qualifying earnings for the QE day.
Example 1: Heung-min works out an individual super guarantee amount for Stina
Heung-min pays his employee Stina $1,000 of qualifying earnings on 4 January 2028 (the QE day, or payday). The individual super guarantee amount for this QE day is $120 ($1,000 × 12%).
End of exampleIndividual base super guarantee shortfall
The individual super guarantee amount, less any on-time eligible contributions, gives the individual base super guarantee shortfall for a particular QE day (payday). Your individual base super guarantee shortfall will be nil if you make sufficient contributions that are received by the super fund within 7 business days after you pay your employee (or a longer period where applicable).
Example 2: Ali makes an on-time eligible contribution to Patrick's super fund
Ali pays her employee Patrick $1,000 of qualifying earnings on 4 January 2028 (the QE day). The individual super guarantee amount for this QE day is $120 ($1,000 × 12%).
Ali pays $120 to Patrick's nominated super fund on 4 January 2028 – that is, on the same day she pays Patrick's qualifying earnings. It is received by the fund on 7 January 2028 (with all the required information to allocate it to Patrick's account).
Because the contribution of $120 is received within 7 business days after the QE day of 4 January 2028, the individual base super guarantee shortall for this QE day is $0. That is, the amount of on-time contributions is $120.
End of example
Example 3: Margarete makes a late eligible contribution to John's super fund
Margarete pays her employee John $1,000 of qualifying earnings on 4 January 2028 (the QE day). The individual super guarantee amount for this QE day is $120 ($1,000 × 12%).
Margarete pays $120 to John's nominated super fund on 20 January 2028. The payment is received by the fund on 25 January 2028 (with all the required information to allocate it to John's account).
Because the contribution of $120 is received more than 7 business days after the QE day of 4 January 2028, and there are no longer periods that apply to this contribution, the individual base super guarantee shortfall for this QE day is $120. That is, the individual super guarantee amount not received on time is $120.
End of exampleIndividual final super guarantee shortfall
If your individual base super guarantee shortfall is greater than nil, we deduct any late eligible contributions you have made to determine your individual final super guarantee shortfall amount. Late contributions are contributions received by the super fund more than 7 business days (unless a longer time applies) after you pay your employee, but before we assess you for a super guarantee charge (the 'late period').
The total of all your individual final super guarantee shortfall amounts for a particular QE day (payday) is then used to calculate the first component of the super guarantee charge for that QE day.
Example 4: Rick makes a contribution to Amira's super fund late, but before an assessment is made
Rick pays his employee Amira $1,000 of qualifying earnings on 4 January 2028 (the QE day). The individual super guarantee amount for this QE day is $120 ($1,000 × 12%).
Rick pays only $100 to Amira's nominated super fund and doesn't make this payment until 20 January 2028. It is received by the fund on 25 January 2028 (with all the required information to allocate it to Amira's account).
The individual base super guarantee shortfall for the QE day (4 January 2028) is $120. This is the individual super guarantee amount less any on-time eligible contributions ($0).
We make a super guarantee charge assessment on 11 April 2028. After deducting the late eligible contribution of $100, the individual final super guarantee shortfall for this QE day is $20. This is the individual super guarantee amount less any on-time eligible contributions ($0) and late eligible contributions ($100).
End of exampleIndividual notional earnings
Individual notional earnings are calculated for each employee by multiplying the general interest charge rate and the individual base super guarantee shortfall for that employee. This amount is then compounded daily for each day in the late period the employer has an individual super guarantee final shortfall for that employee that is greater than nil. This means that the notional earnings for one day is included in 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 super guarantee shortfall for that employee greater than nil for a particular QE day (payday). That is, you will accrue notional earnings if your individual super guarantee contribution for your employee is not received by the fund within 7 business days after the day you pay your employee (or within a longer period where applicable).
Your individual notional earnings stop accruing at the earlier of:
- the day you make a late eligible contribution that reduces your individual final super guarantee shortfall for the employee to nil
- the day before the ATO makes a super guarantee charge assessment.
Example 5: Individual notional earnings for Amira
Continuing example 4:
- the individual base super guarantee shortfall for the QE day (4 January 2028) is $120
- on the day we make the super guarantee charge assessment (11 April 2028), there is an individual final super guarantee shortfall ($20) for the QE day.
Notional earnings start to accrue on 14 January 2028 (the day after the last day to make an on-time eligible contribution).
Notional earnings continue to accrue until the day before the assessment is made (10 April 2028). This is because Rick continues to have an individual final super guarantee shortfall for Amira that is greater than nil on that date.
On 10 April 2028, the notional earnings are the general interest charge daily rate (this varies) × the individual base super guarantee shortfall ($120), compounded for each of the 88 calendar days from 14 January 2028 to 10 April 2028.
End of exampleAdministrative uplift amount
The administrative uplift amount reflects the cost of enforcement.
Initially the administrative uplift amount is 60% of your total individual final super guarantee shortfalls and total individual notional earnings for a QE day (payday).
Your administrative uplift amount can be reduced (potentially to nil) if either or both of the following apply:
- If you have not received an ATO-initiated assessment to pay super guarantee charge in the 2 years up to the relevant QE day, we will reduce your administrative uplift by 20 percentage points. For this purpose we ignore:
- any super guarantee charges you may have incurred prior to the start of Payday Super on 1 July 2026
- any assessment based on information from a voluntary disclosure statement.
- If you make a voluntary disclosure statement before we assess you for the super guarantee charge we will reduce your administrative uplift amount by up to 40 percentage points, depending on how quickly you make the disclosure.
Both reductions may apply to the same super guarantee charge amount, potentially reducing the administrative uplift from 60% to 0%.
|
Lodgment date of voluntary disclosure statement, starting on the QE day |
If you have not been assessed to pay super guarantee charge in the 2 years ending on the QE day* |
If you have been assessed to pay super guarantee charge in the 2 years ending on the QE day* |
|---|---|---|
|
Within 30 days |
0% |
20% |
|
31 days to 60 days |
5% |
25% |
|
61 days to 120 days |
10% |
30% |
|
More than 120 days |
25% |
45% |
|
Not lodged before assessment |
40% |
60% |
Voluntary disclosure statement
Unless we have already made an assessment, you should pay any outstanding amount of super guarantee to your employee's super fund before considering whether or not to lodge a voluntary disclosure statement. This can reduce the amount of super guarantee charge you have to pay for a QE day (payday).
Example 6: Jody's administrative uplift calculation
Jody has 3 employees. For the payday of 4 January 2028 (the QE day), she fails to pay her employees' super guarantee contributions in full and on time.
On 11 April 2028 we assess Jody for the super guarantee charge. The total of her individual final super guarantee shortfalls and notional earnings is $400.
The administrative uplift amount is initially calculated as 60% of this amount:
$400 × 60% = $240
However, Jody's administrative uplift amount is reduced to 40% because this is the first ATO-initiated super guarantee charge assessment we've made for her since 1 July 2026:
$400 × 40% = $160
Jody's total super guarantee charge for the QE day of 4 January 2028 is:
$400 + $160 = $560
Jody did not lodge a voluntary disclosure statement so there is no further reduction in her administrative uplift amount.
End of exampleChoice loading
You must follow the choice of fund requirements for your employees to avoid a choice loading component being included in the super guarantee shortfall. This includes when you onboard a new employee.
The choice loading is 25% of the value of contributions for any QE day (payday) where you have not followed the choice of fund rules.
The choice loading is a maximum of $1,200 for each notice period. A notice period will run until the ATO tells you in writing that it ends. It will usually cover multiple QE days. A notice period will begin on the later of:
- 1 July 2026
- the day the employee starts working for you
- the end of your previous notice period for the employee.
If you attempted to pay a contribution to an employee's stapled fund according to information provided by us, but the fund would 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.
Example 7: Fabian required to pay choice loading
Fabian pays his employee Renee $1,000 of qualifying earnings on 4 January 2028 (the QE day). The individual super guarantee amount for this QE day is $120 ($1,000 × 12%).
Due to an administrative error, Fabian opens an account in Renee's name with his default super fund. He pays the $120 super guarantee contribution there, rather than Renee's nominated account.
Fabian does not fix this error by making a contribution to the correct fund within 7 business days after the QE day. This means he will have to pay a choice loading as part of his super guarantee charge.
For the QE day of 4 January 2028, Fabian's choice loading will be:
$120 × 25% = $30
End of exampleReceiving and paying an assessment
If you don't pay super guarantee for your employees correctly, we will calculate your super guarantee charge and send you a notice of assessment. The assessment is made on the day the notice is given to you.
Until you get an assessment of super guarantee charge, you should pay your late contributions to your employee's super fund.
If you receive a super guarantee charge assessment
You pay the super guarantee charge to us, rather than your employee's super fund. The due date for payment is the day the assessment is made.
Once you pay the super guarantee charge, we transfer the shortfall amount and notional earnings to the employee’s super account.
If you don't pay super guarantee charge
If you don't pay the super guarantee charge within 28 days of an assessment, we will send you a written Notice to Pay. This requires you to pay a specified amount of the unpaid super guarantee charge.
If you don't pay the amount specified in the Notice to Pay within 28 days, you will become liable to pay a late payment penalty.
Super guarantee charge and tax deduction
You can claim a tax deduction for super guarantee charge relating to QE days from 1 July 2026 onwards. This applies to all components of a super guarantee charge that you pay:
- individual final super guarantee shortfall
- notional earnings
- administrative uplift amount
- choice loading.
You cannot claim a tax deduction for:
- general interest charge that accrues on a late super guarantee charge payment
- a late payment penalty imposed for failing to pay the super guarantee charge.
- super guarantee charge amounts relating to quarterly super guarantee periods before 1 July 2026.