How Superannuation Guarantee Charge (SGC) Statements Work for Directors
As a director, you have a legal obligation to ensure that your company meets its superannuation guarantee (SG) obligations. This includes lodging SGC statements with the Australian Taxation Office (ATO) on time and accurately.
What is an SGC statement?
An SGC statement is a document that employers must lodge with the ATO if they have not paid the correct amount of SG contributions to their employees’ super funds.
The SGC is a penalty that is imposed on employers who do not meet their SG obligations.
How is the SGC calculated?
The SGC is calculated as a percentage of the amount of SG that the employer should have paid but did not. If an employer should have paid $100 in SG contributions but only paid $80, the SGC would be $20.
What information does an SGC statement need to include?
An SGC statement must include the following information:
- The employer’s name and ABN
- The employee’s name, TFN, and date of birth
- The amount of SG that should have been paid for the quarter
- The amount of SG that was actually paid for the quarter
- The amount of SGC that is owed
When is an SGC statement due?
SG contribution payments are due within 28 days of quarter end. If payment is not made on time, the SGC statements must be lodged with the ATO before the 28th day of the following month after that. For example, the SG contributions for the March quarter must be paid by 28 April. If payment is not made by this date, SGC statements must be lodged with the ATO by 28 May.
What is the SG shortfall calculated on?
The SG shortfall is calculated on full salary and wages and not just ordinary time earnings. In other words, overtime and other benefit payments are captured in the calculation of the SGC shortfall, which can significantly increase the SG liability.
What are the penalties for not lodging an SGC statement?
There are two types of penalties for not lodging an SGC statement:
- Part 7 penalty is a fixed penalty of $200 per employee per quarter.
- Part 8 penalty is a percentage penalty that is calculated on the amount of SGC that is owed. The percentage penalty is currently 200%.
How can I lodge an SGC statement?
There are two ways to lodge an SGC statement:
- Online through the ATO’s website
- By mail
The ATO’s website is the easiest and quickest way to lodge an SGC statement. You can find the SGC statement form on the ATO’s website.
What are the responsibilities of directors in relation to SGC statements?
As a director, your responsibilities in relation to SGC statements may include
Ensuring that your company has a system in a place to calculate and pay SG contributions on time
- Ensuring that SGC statements are lodged with the ATP on time and accurately
- Taking reasonable steps to prevent SG shortfalls
Here are some additional things for directors to keep in mind about SGC statements:
- The ATO has a number of tools and resources available to help directors with SGC statements, including a calculator and a guide.
- Directors can also use the ATO’s secure messaging service to lodge SGC statements on behalf of their company.
- If a director is found to be personally liable for SGC shortfalls, they may be subject to penalties via the Director Penalty regime, including fines and imprisonment.
About the author
Greg Quin is a Partner at HLB Mann Judd Insolvency WA and has been with the team for 14 years. Greg oversees the daily operations of the many insolvency appointments managed by the HLB Insolvency team and looks after the operations of the practice.
If you have any queries about insolvency matters, please feel free to contact Greg on 08 9215 7900, 0402 943 091 or via email to firstname.lastname@example.org.