What is the Superannuation Guarantee Charge (SGC)?

Jamie Walsh • December 23, 2024

What is the Superannuation Guarantee Charge (SGC)?

What is the Superannuation Guarantee Charge (SGC)?

The Superannuation Guarantee Charge (SGC) is a penalty that employers must pay if they fail to meet their superannuation obligations. It ensures that employees receive the super contributions they are entitled to by law. Here’s a breakdown of what it is and how it works.

Employers are required to pay superannuation contributions on behalf of eligible employees at the current rate of 11.5% (rising to 12% from 1 July 2025). If these contributions are late, unpaid, or underpaid, the employer must pay the SGC to the Australian Taxation Office (ATO).

The SGC is more than just the unpaid super. It includes:

The shortfall: The unpaid or underpaid super contributions.
Nominal interest: Currently 10% per annum, calculated from the start of the relevant quarter.
An administration fee: $20 per employee, per quarter.

Unlike regular super contributions, the SGC is not tax-deductible for employers, making it a costly mistake.

To avoid the SGC, employers must keep accurate records and ensure super is paid by the quarterly due dates. If you’re an employee, checking your payslip and super account regularly can help you spot any issues early.

The SGC highlights the importance of compliance, ensuring that employees receive the retirement savings they deserve while encouraging employers to meet their obligations on time.

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