29/07/2026
Superannuation payments for employees are one of those issues that should be at the top of the employer's list. The reason is that unpaid superannuation becomes the personal liability of the business owner or the director if it is not paid.
While I have seen many of these situations over the years, I want to share with you the worst case I have come across. Unfortunately, this one was the result of an accountant charged with managing the business owner's bookkeeping tasks.
🌟 Setting the scene with relevant information to improve your understanding of the issues.
👉 The company employs 22 employees
👉 The last point of super reconciliation with the accounting software was 2 years 7 months earlier
👉 The accounts indicated a superannuation error of over $20K
🌟 Issues we found
👉 Several employees had missing superannuation account information, or it was incorrect.
👉 Random payments, for random employees for random periods.
👉 A single employee is selected, and a payment is made for random periods.
👉 The superannuation payments returned from the super funds because the employee's super account information was incorrect, were allocated to the super expense account instead of the super liability account for repayment to the super fund after the super fund data error was found and corrected.
👉 Unpaid super not reported on the Super Guarantee Charge Statement.
🌟Corrective actions
👉 We corrected the missing or incorrect superannuation information by talking to the employees or using the ATO's Default Superannuation Lookup service
👉 Where both options failed, the employee was enrolled into the employer's default superannuation fund as required by the law.
👉 Matching bank statement payments with super payable transactions and then to super expenses that made up the payment.
👉 A super returned liability account was created. The returned funds were re-allocated from the 👉 superannuation expense to this account so that payments could be made again with the correct employee superannuation account information.
👉 Superannuation Guarantee Charge statements created as required by law.
🌟 The net outcome
👉Unpaid superannuation admin charges and interest amounted to over $230K, with over $57K in ATO administration fees and interest so far.
🌟 Fail to provide an SGC statement when required.
You're liable for a Part 7 penalty – Superannuation Guarantee (Administration) Act 1992 (SGAA) if you:
👉 lodge your SGC statement late, or
👉 fail to provide a statement or information when requested during an audit.
The maximum penalty is 200% of the SGC.
NOTE: The above "Failure to provide" penalty had not been applied at the time of writing this article. If it is ultimately used, then the cost of this failure will be considerably higher.
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