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Superannuation guarantee charge liability

Employers may become liable to pay the superannuation guarantee charge (the sgc) if they fail to pay their superannuation guarantee amounts  (sga) in a timely fashion. The charge itself is extremely penal and should be avoided at almost any cost. ‘Employers’ may also include contractors who engage sub-contractors under certain conditions – such as when, where and how their contracts are to be performed, in a way that might be seen as workplace environmental control.

The superannuation guarantee charge liability can crystallise in the following circumstances (and this list may not be exhaustive):

  • if sga payment obligations are not met within 28 days of the end of the quarter in which they become payable;
  • failure to meet ‘Choice of Super’ obligations in a timely way; and
  • underpayment of sga/ superannuation obligations within prescribed timeframes.

It is our understanding that the superannuation guarantee charge liability may be imposed even if the superannuation guarantee amount has been paid in full, but late. For details of the charge and how it will be calculated by the ATO, search their website.

Consult your business adviser or tax accountant as to where you stand in this regard if you have any concerns.

Continuum Financial Planners Pty Ltd offers a range of services in relation to Superannuation, including advice to employers on the establishment of default superannuation arrangements compliant with Awards and other regulations, personal superannuation; and self-managed superannuation. Our team of experienced, professional advisers is ready to assist you determine and implement your superannuation strategy: to arrange a meeting with one of our team, call our office on 3421 3456; or complete the website Contact form.

(Originally posted in September 2008, this article has been occasionally updated/ refreshed, most recently in January 2020.)

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