Engage and communicate early with us
We work with employers by providing tools and calculators to help them understand and meet their super guarantee (SG) obligations and 'get it right'.
We base our compliance approach on the relevant facts and circumstances of each case. We support employers who engage with us and want to get things right. We take firmer action for those unwilling to meet their super obligations.
In some cases, an employer may be subject to a SG audit.
If you're unsure about what action to take for your situation, phone us on 13 10 20.
How to actively engage with us
Employers that actively engage with us:
- maintain regular contact as required
- provide information when requested
- take any corrective action required.
We are less likely to impose additional penalties for employers who engage with us and have a compliance history that demonstrates they have been generally compliant with their super obligations.
Circumstances where penalties are applied
Employers who don't pay the right amount of super contributions to the right super fund by the due date are:
- required to lodge a Superannuation guarantee charge statement
- liable for the super guarantee charge (SGC).
Additional super guarantee charge (known as Part 7 Penalty)
Additional penalties may be imposed under Part 7 of the Superannuation Guarantee (Administration) Act 1992 on employers who fail to provide either:
- a Superannuation guarantee charge statement for a quarter by the due date, or
- information relevant to assessing their liability to pay the SGC for a quarter after being requested to do so.
The maximum Part 7 penalty is 200% of the amount of the SGC payable.
Having difficulty meeting your obligations?
Employers who are having difficulty meeting their super obligations are encouraged to make a 'voluntary disclosure'. Where this occurs, we have discretion to consider partial or full remission of the Part 7 penalty to ensure that employers are treated appropriately.
Remission will be considered based on the circumstances of the case. We will place particular emphasis on the degree that the employer has attempted to comply and their compliance history. For example, remission may be provided to employers who lodge a Superannuation guarantee charge statement after the relevant due date, but before audit action was started.
If you're unsure what action to take for your situation, phone us on 13 10 20.
We can also provide assistance to complete a Superannuation guarantee charge statement. If you are unable to pay on time, we can help you work out a payment plan.
Employers unwilling to meet their obligations
If employers fail to engage with us by not replying promptly to our correspondence or not taking steps to resolve their SG discrepancy, we will take stronger action, including additional penalties.
We may also issue an estimate of a SGC liability, a garnishee notice or a director penalty notice.
We take this approach with employers who:
- repeatedly fail to pay the correct amount of SG
- attempt to obstruct our ability to determine a SGC liability
- repeatedly fail to keep appointments
- repeatedly fail to supply information without an acceptable reason
- deliberately supply information that is irrelevant, inadequate or misleading
- engage in any culpable behaviour to delay the provision of information.
Penalties relating to super guarantee
If you don't meet your SG obligations, you may be liable for a range of penalties or charges on top of the SGC.
Choice liability penalty
A choice liability penalty may be applied for not complying with your choice of fund obligations for your eligible employees – for example, if you:
- haven't given your employee a Standard choice form within the required timeframe
- have paid their super to a complying fund but not the super fund they chose
- charged them a fee for implementing their choice of fund
- for employees that commence on or after 1 November 2021
- contributed to a fund without requesting a stapled super fund, or
- to a fund that is not the stapled super fund notified by the Commissioner.
The choice liability penalty is part of the SGC.
In some circumstances, we may consider a reduction of the choice shortfall which may arise from genuine attempts by an employer to meet their choice obligations.
Director penalties
The director of a company who fails to meet a SGC liability in full by the due date automatically becomes personally liable for a penalty equal to the unpaid amount.
When a SGC liability remains outstanding, a director penalty notice may be issued. This enables the start of legal proceedings to recover the penalty. Even without issuing a notice, the penalty can be collected by other means – for example, by withholding a tax refund.
The penalty will be remitted if your company pays the outstanding amount at any time.
Other types of penalties and charges
You may be liable for a range of other penalties and charges. These include:
- general interest charge
- administrative penalty for making a false or misleading statement
- additional penalty for
- failing to keep records
- failing to pass on a TFN
- undertaking arrangements designed to avoid your obligations.
Amendments, objections, appeals and reviews
When we receive your Superannuation guarantee charge statement, it is treated as an assessment issued on that date.
Amendments
You can ask for an amendment at any time within 4 years of the date the assessment was made. That is, the date we received your Superannuation guarantee charge statement. You must provide copies of all supporting documents with your amendment request.
Objections
You can object to an ATO assessment of your SGC liability within 60 days of the date the assessment was made.
To object to an assessment, you must:
- provide us with the grounds for your objection in writing
- sign your statement (or have an authorised representative sign it)
- provide us with copies of the evidence to support your objection.
You must still pay the SGC, even if you're objecting or requesting an amendment to your assessment. If you're successful, we will refund any overpayment.
You can't object to the general interest charge, although you can ask us to remit it if the circumstances are exceptional.
Appeals and review process
If your objection is not allowed in full, you may:
- apply to the Administrative Appeals Tribunal for a review, or
- appeal to the Federal Court against the decision within another 60 days.
Summary of Module 7
Remember, to reduce the risk of penalties:
- Pay the correct amount of super guarantee, on time and to the right fund
- Engage with us and communicate early in the process
- Be aware of circumstances that give rise to penalties
- Be aware of the different types of penalties
- Understand your rights to amendments, appeals, objections and review processes.
Return to Module 6: Rectifying late payments.
Continue to Module 8: Resources.