The Hidden Cost of Paying Superannuation Late
Superannuation is an important employer obligation — and one of the most unforgiving when deadlines are missed. Even if you’re just a few days late, the penalties can quickly snowball into a much larger compliance issue. What many business owners don’t realise is that a missed super payment isn’t something you can quietly fix later. It can trigger mandatory reporting to the ATO, non-deductible payments, and interest charges that can significantly impact your bottom line.
Let’s break down what’s really at stake when employees super is paid late, and why proactive advice can save you more than just money.
When to Pay Super Contributions: Timing Matters
You must pay your employees Super Guarantee contributions (SG) by the quarterly due dates each year:
- 28 January
- 28 April
- 28 July
- 28 October
Miss a deadline, and your business may face the Superannuation Guarantee Charge (SGC). This is a mandatory penalty enforced by the Australian Taxation Office (ATO). It’s not just a slap on the wrist. It’s a cascading cost structure that includes:
- SG shortfall (the missed super amount)
- 10% interest on the shortfall amounts, calculated from the quarter’s start, not the due date
- $20 per employee, per quarter administration fee
- No tax deductibility, unlike regular super contributions
Important to note: the SG payment must be processed by the employees superannuation fund by the deadline, so in most cases, the payment will need to be made well before the deadline to allow time for the money to reflect in the account.
Late vs On-Time Payment
Let’s say you have five employees earning $60,000 each, with superannuation guarantee contributions of 12%. Your quarterly SG obligation is $9,000 (5 employees × $1,800 each).
- On-time payment: $9,000, which is tax deductible
Assuming the employer pays 7 days after the deadline, for the April–June quarter (due 28 July), interest is calculated from 1 April to 4 August = 125 days
Super Guarantee Charge (SGC):
- SG shortfall: $9,000
- Interest: 10% annual =
$9,000 × (125 ÷ 365) × 10% = $308.22 - Admin fee: 5 × $20 = $100
- Total payable: $9,408.22 ($408.22 more than the SG would have been if made on time)
- Not tax deductible
Effective Cost Difference
- On-time: $9,000 (tax deductible, so it reduces tax)
- Late: $9,408.22 (non-deductible, meaning a higher net cost)
- Net tax impact:
If your company tax rate is 25%, you lose a $9,000 tax deduction, which increases your tax bill by $2,250 - Total extra cost:
$408.22 + $2,250 = $2,658.22
A one-week delay cost this example business an extra $2,658.22, and that's just for 5 employees. Larger teams, higher wages or longer delays result in even higher penalties. And once you're late, you must lodge a Super Guarantee Charge Statement with the ATO, even if you’ve already paid the super, or face further penalties.
As you can see, the loss of the tax deduction causes a much more significant issue than just the unpaid SG payments, interest on the outstanding amount and the administration fee.
Why Late Super Signals a Bigger Issue
Consistently late super payments are often a red flag for underlying cash flow problems or poor financial systems. And while many business owners mean well, the ATO doesn’t assess intent, it assesses compliance.
More importantly, a pattern of missed payments can harm employee trust and damage your reputation as an employer.
How to Stay on Top of Super Payments
Many late super payments aren’t due to negligence, they’re due to poor systems or misunderstandings about how the rules work. Here are some ways to stay compliant:
1. Use Payroll Software That Automates Super
Modern payroll systems like Xero can calculate and process super payments for eligible employees automatically through SuperStream-compliant services. Just make sure your settings (e.g. SG rate, pay cycles) are up to date. The minimum amount for super contributions is 12% of the employee's ordinary time earnings (OTE) from July 2025.
2. Pay More Frequently Than Quarterly
The ATO only requires payment quarterly, but if your cash flow allows for it, monthly or even fortnightly super payments can:
- Improve cash flow management
- Reduce the risk of missing deadlines
- Match employee pay cycles, which helps with transparency
If you're looking to match your employee pay cycles, be sure to understand the payment frequency outlined in any relevant award or employment agreement.
3. Mark the Due Dates (and Work Backwards)
Super is due 28 days after the end of each quarter, but payment clearing in the super fund can take a few days. To ensure you pay superannuation guarantee contributions on time, aim to process super at least 5 business days before the due date.
4. Delegate and Set Reminders
Even with automation, responsibility can’t fall through the cracks. Assign someone in your team (or your bookkeeper/accountant) to double-check payment runs and due dates to make sure you pay super on time.
Know What Triggers an SGC Liability
Even small errors can lead to a Super Guarantee Charge. Here’s what to watch for:
- Paying late (even by a day)
- Underpaying the correct amount
- Paying to the wrong fund or not using a SuperStream-compliant method
- Missing a newly onboarded employee in the first pay cycle
What to Do If You’ve Paid Late
Mistakes happen, what matters is how you handle them.
If you’ve paid late, you must:
- Lodge an SGC Statement with the ATO — even if you've now paid the super
- Calculate the interest and admin fees
- Avoid further penalties by lodging quickly
Tip: Your accountant can assist with this process and help put better systems in place moving forward.
Get Help Before It Becomes a Bigger Problem
Keeping up with changing SG rates, award interpretations, and ATO compliance can be overwhelming, especially for growing businesses.
An experienced business accountant can:
- Review your payroll and super setup
- Set up systems for on-time payments
- Support you if you’ve fallen behind
- Help with bookkeeping and payroll compliance
Reportable Employer Super Contributions (RESC) – Why Accurate Reporting Matters
If you offer employees additional superannuation contributions, such as salary sacrifice arrangements or extra employer contributions above the employee's Super Guarantee, these are known as Reportable Employer Super Contributions (RESC).
RESC doesn’t affect your compulsory SG payments, but it must be reported separately on your employees’ PAYG payment summary annual report or income statement. It’s used by the ATO to assess eligibility for things like:
- Certain government benefits, including family tax benefits
- Child support payments
- Higher Education Loan repayments
Getting RESC wrong (or failing to report it) can lead to compliance issues for your business and unintended financial consequences for your employees.
Avoid the Trap: Get Ahead with Professional Advice
Staying compliant with super isn’t just about ticking boxes — it’s about protecting your business and doing right by your team. If you’re finding it hard to keep on top of deadlines or unsure whether your systems are up to scratch, it’s worth speaking to an accountant. A proactive advisor can help you set up reliable systems that ensure super is paid on time, review your cash flow and forecasting so you’re not caught short each quarter, and guide you through your Super Guarantee Charge (SGC) obligations if you’ve already missed a payment.
If you need support, the team at Bonerath & Co is here to help. Reach out for expert advice and peace of mind.
