The Superannuation Guarantee Charge (SGC) is a penalty the Australian Taxation Office (ATO) applies to employers who fail to pay their employees' superannuation correctly or on time.
What triggers the SGC?
The SGC applies when an employer does not pay the required super contributions — currently 11.5% of ordinary time earnings — by the quarterly due date. The charge is more expensive than simply paying the super on time, which is designed to discourage non-payment.
The SGC includes the unpaid super amount, an interest component of 10% per year, and an administration fee. Unlike regular super contributions, SGC payments are not tax-deductible for the employer, making it a costly penalty.
What happens to your super if the SGC is charged?
If your employer is charged the SGC because they did not pay your super, the ATO collects the charge from the employer and then distributes the super portion to your nominated super fund. This means your super is eventually protected even if your employer initially failed to pay it.
How do you know if your employer is behind on super?
Check your super fund balance regularly through your fund's portal or through myGov. Super is paid quarterly, so if several months pass with no contributions appearing, it may be a sign that your employer has not paid.
You can also report suspected non-payment to the ATO. The ATO investigates these reports and can pursue employers on your behalf.
Does this affect your DASP claim?
If your employer owes you super that has not yet been paid, it may not appear in your super fund when you apply for your Departing Australia Superannuation Payment (DASP). Make sure all contributions are showing in your account before you submit your DASP claim. If contributions are missing, report them to the ATO before you leave.
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