The Australian Taxation Office (ATO) has released a fact sheet explaining its compliance and penalty approach in relation to employer superannuation guarantee (SG) obligations set out in the Superannuation Guarantee (Administration) Act 1992 (SGA Act).

The ATO’s compliance and penalty approach applies to employers who are unable or unwilling to meet their SG obligations, including non-payment, under-payment, or late payment of SG contributions to an eligible employee.

Employers who don’t pay the minimum amount of SG for an employee by the due date are liable for the super guarantee charge (SGC), which is made up of:

  • SG shortfall amounts calculated on an employee’s salary or wages
  • interest on those amounts (currently 10%) and
  • an administration fee ($20 per employee, per quarter).

Additional penalties may also include:

  • Part 7 penalties under the Superannuation Guarantee (Administration) Act 1992, which are up to double the SGC amount payable for the quarter
  • General Interest Charges (GIC) and
  • administrative penalties, with a base penalty amount of up to 75%.

Further, a director of a company that fails to meet an SGC liability in full by the due date automatically becomes personally liable for a penalty equal to the unpaid amount. The fact sheet also provides examples of behaviour that will attract closer scrutiny from the ATO and mitigating factors that may be taken into account when determining the appropriate level of penalties.