Unpaid super in Australia and employer obligations under Payday Super

From 1 July 2026, the way employers must pay superannuation guarantee (SG) changed. Instead of making quarterly payments, you must now pay each employee's super with each payday: the contribution has to be received by the employee's super fund within 7 business days of the payday. If it is not, the Australian Taxation Office (ATO) can assess a super guarantee charge (SGC) that adds interest and an enforcement uplift on top of the unpaid amount.

Unpaid super is one of the most expensive payroll mistakes a small or medium business can make, because the ATO now matches payroll data against fund records automatically and the charge compounds daily while it remains unpaid. This guide sets out who the obligation applies to, what earnings attract super, the deadlines that trigger a charge, what the charge actually costs, and the steps to fix a missed payment before the ATO gets involved.

Who must pay super and on what earnings

The SG obligation applies to employers of almost everyone who works for them. Full-time, part-time and casual employees are all covered, and so is a wider group defined in s 12 of the Superannuation Guarantee (Administration) Act 1992 (Cth) (the SGA Act), including independent contractors engaged wholly or principally for their labour, sportspeople and performers, and company directors. The ATO confirms that the payday deadlines apply to all of these workers.

There is no minimum earnings threshold. The old rule that super was only payable for employees earning $450 or more in a month was removed from 1 July 2022, so SG is owed for every employee regardless of how little they earn. There is also no age cut-off.

The amount is calculated on an employee's qualifying earnings, defined in s 10A of the SGA Act. Qualifying earnings includes ordinary time earnings, all commissions, bonuses and allowances, director fees, and payments to contractors engaged mainly for their labour. One-off payments such as a Christmas bonus count as well. This is why the base you calculate super on matters: if a payment is left out of the qualifying earnings base, every payday produces a small shortfall that later becomes part of a charge.

A few scoping points worth knowing:

Quarterly rules still apply to old periods: super owed for earnings paid before 1 July 2026 continues to be governed by the quarterly system, including the old due dates and SGC statements for missed quarters.
A cap applies: SG only needs to be paid on earnings up to the maximum contributions base, which is indexed each year.
Contractors are a common gap: businesses often treat labour-only contractors as outside super entirely, but the extended employee definition in s 12 of the SGA Act catches most of them.

The core duty: pay 12% of qualifying earnings on each payday

The central obligation is straightforward. For each payday, you must ensure that super contributions equal to 12% of each employee's qualifying earnings are received by that employee's fund, with all the information needed to allocate them to the member's account, within 7 business days after the payday. The 12% rate is set by s 17A of the SGA Act, and the 7 business day window is the usual period for receiving contributions under s 18C.

A business day excludes weekends and any day that is a public holiday for the whole of a state or territory. The clock starts on the payday itself, and the contribution must be received, not merely sent, by the deadline. A payment made through a clearing house needs to allow enough processing time, which is why the ATO recommends paying super on payday itself rather than waiting.

The SGA Act allows longer periods in specific situations, and these are the deadlines that most often catch employers out:

First contribution for a new employee or new fund: the first contribution to a fund after an employee starts, or after a fund change, can be received within 20 business days of the payday.
Out-of-cycle payments: a one-off payment such as a bonus that is out of cycle with the regular payday can be covered by the contribution for the next regular payday.
Exceptional circumstances: where the ATO determines that a class of employers is affected by a natural disaster or a widespread technology outage, contributions can be received within 20 business days of the payday or the determination.
Bunching: where extended due dates overlap, later due dates can pull earlier ones forward to the same day.

The fund you pay into also matters. If an employee has not chosen a fund, you must pay into their stapled fund, being an existing fund they already hold, as set out in ss 32Q and 32R of the SGA Act. Paying to the wrong fund does not count as paying on time, and it can add a choice loading to any charge that arises.

What happens when super is paid late: the super guarantee charge

If a contribution is not received within the applicable deadline, the ATO calculates the SGC itself and sends you a notice of assessment. One of the practical changes of Payday Super is that you no longer lodge an SGC statement; the ATO works out the charge from its own data and assesses you for each payday where a shortfall exists.

The SGC has four components:

Individual final super guarantee shortfall: the unpaid 12% amounts for each employee, after any late contributions you make before assessment are credited.
Notional earnings: interest on the unpaid amounts, calculated at the general interest charge rate and compounded daily from the day after the deadline until the shortfall is paid or the ATO assesses.
Administrative uplift: initially 60% of the shortfall plus notional earnings, reduced where you voluntarily disclose or have a clean compliance history, and capable of falling to zero.
Choice loading: an additional 25% of the value of contributions, capped at $1,200 per notice period, where you have not followed the choice of fund rules.

The SGC is paid to the ATO, not to the employee's fund, and it is due on the day the assessment is made. The ATO then transfers the shortfall and notional earnings into the employee's super account, so the employee still receives their super, but the business carries the interest and uplift.

If the charge is not paid, the position escalates quickly:

28 days after assessment: the ATO issues a written notice to pay the outstanding charge.
28 days after that notice: a late payment penalty applies, equal to 25% of the unpaid amount, or 50% where the employer has had a similar penalty in the previous 24 months, under s 59C of the SGA Act.
General interest charge: the SGC itself attracts the general interest charge under s 49 of the SGA Act while it remains unpaid.
Directors: the ATO can make directors personally liable for a company's unpaid SGC under the director penalty regime in Division 269 of Schedule 1 to the Taxation Administration Act 1953 (Cth), which is a significant personal exposure for owners of incorporated businesses.

The ATO has said that in the first year of Payday Super it will take a supportive approach, focused on employers that are not trying to move to payday payments, are not fixing errors, or are not paying super at all. That support does not extend to ignoring missed payments, and the ATO's data-matching means it can identify them without an audit.

One point that surprises many employers: since 1 July 2026, the SGC is tax-deductible. All components of a charge relating to paydays from 1 July 2026 can be claimed as a deduction, although the general interest charge on late payment, late payment penalties, and SGC relating to quarterly periods before 1 July 2026 cannot. Under the old quarterly system the SGC was not deductible at all, so this is a genuine change, but the deduction is no comfort against the interest and uplift costs.

How to fix a missed payment

If you realise a contribution was late, the order of steps matters because it directly affects how much charge you pay:

Pay the fund first: Until you receive a notice of assessment, late contributions you make to the employee's fund are credited against the shortfall. The final shortfall is only what remains unpaid at the time of assessment, so a contribution made the day after the deadline, before the ATO assesses, removes that component of the charge.
Consider a voluntary disclosure statement: Lodging a voluntary disclosure statement under s 33 of the SGA Act reduces the administrative uplift. The reduction is up to 40 percentage points depending on how quickly you disclose, and a further 20 percentage points applies if the ATO has not made an assessment against you in the previous two years. Combined, the uplift can fall from 60% to 0%, which is often the difference between a manageable remediation and a painful one.
Keep the records: You will need evidence of when contributions were paid and received, the payroll records for the relevant paydays, and the fund receipts, to show the ATO what was paid and when. The timing evidence is what proves a contribution was received within the window or what explains the delay.

For super owed for earnings paid before 1 July 2026, the old rules still apply: you must lodge SGC statements for missed quarters and pay the charge calculated on the quarterly shortfall, and that charge is not tax-deductible.

Your compliance checklist

Run through this checklist each pay cycle to keep the payday obligation on track:

Confirm who is covered: list every employee, including labour-only contractors, and the fund each one uses, whether chosen or stapled.
Configure payroll to pay on payday: set the payroll system to release super contributions on each payday, and allow clearing house processing time.
Calendar the longer deadlines: first contributions to new funds, out-of-cycle payments, and any exceptional circumstance determinations.
Reconcile every pay cycle: check that contributions were received by each fund within 7 business days, and chase anything missing immediately.
Fix errors before assessment: if a payment was late, pay the fund straight away, then consider a voluntary disclosure statement to cut the uplift.
Review the base: check that qualifying earnings, including commissions, bonuses and allowances, are correctly reflected in the super calculation.
Get advice on anything unusual: fund changes, contractor arrangements, termination payments and incentive plans all have super consequences worth checking before you act.

When to get professional help

Most single-payday errors can be fixed by paying the fund promptly, but a lawyer or specialist adviser is worth engaging before the problem compounds:

Multiple paydays or employees are involved: recalculating shortfalls across many paydays and employees is where calculation errors creep in, and the ATO's assessments will not give you the benefit of the doubt.
A notice of assessment has been issued: the charge is due immediately, and options for reducing it narrow once assessment has happened.
The ATO is reviewing you: responding to ATO enquiries, notices to pay, or a formal review is a process where an adviser who knows the regime can protect your position.
A company is involved: where directors face personal liability for unpaid SGC, the exposure is personal and it is worth taking advice before the ATO acts.
You want a prevention framework: setting up payroll controls, contract terms and a review cycle that keeps you compliant is the kind of work a practitioner does once so you do not repeat it.

An adviser can quantify the exposure across paydays, manage the ATO engagement, negotiate payment outcomes where the business genuinely cannot pay in full, and put the payroll systems in place so the same issue does not recur.

The deadline that matters now

The duty employers most often miss under Payday Super is not the calculation, it is the timing. Super is only on time when it is received by the fund, not when it leaves your account, and the 7 business day window closes quickly once a payday passes. A contribution sent on day 6 that lands on day 9 is late, and the charge starts compounding interest the next day.

The first action this week is to map every payday to its contribution deadline and set reminders two days before each one, then check last pay cycle's fund receipts. If you find a gap, pay the fund today: a contribution made before the ATO assesses removes the shortfall component of the charge entirely, and a prompt voluntary disclosure can cut the uplift to zero. In unpaid super, speed is not just good practice, it is the difference between a small correction and a charge that grows every day it is ignored.