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Of all the debts a business can owe the ATO, unpaid super is the one treated most seriously. It is employees’ money, the penalties are built in, and directors cannot hide behind the company.
From late super to super guarantee charge
When super is not paid in full by its due date, the employer must lodge a super guarantee charge statement and pay the charge to the ATO instead. The charge is made up of the shortfall, interest and an administration component, and it is calculated on a broader earnings base than ordinary contributions, so it exceeds what was originally due. None of it is tax deductible. Further penalties can apply for failing to lodge the statement.
Since 1 July 2026, under payday super, contributions are due with each pay cycle, not quarterly. Shortfalls therefore arise sooner and more often, and a cash flow problem shows up as a super problem within weeks.
Why directors should care
Super guarantee charge is one of the three liabilities covered by director penalties. If the company has lodged its statements on time, a director penalty notice gives 21 days to pay, or to appoint an administrator, restructuring practitioner or liquidator. If the statements were not lodged on time, the penalty is locked down: only payment removes personal liability. So the first step, always, is to lodge, even if the company cannot pay. See Director Penalty Notice funding.
Using property to clear it
The funding works the same way as for any tax debt. The loan is assessed on the equity in the property and the exit, not on the company’s financials. The security can be company property, property in a related trust, or a director’s property supporting a guarantee. The lender pays the ATO directly at settlement. For a 21-day deadline a caveat loan is the fast instrument; for a longer repayment path, a second mortgage.
The cost comparison
General interest charge on unpaid super guarantee charge runs at 11.43% a year for July to September 2026, compounding daily and not deductible. Interest on a business-purpose loan is generally deductible. The after-tax comparison is in loan interest vs ATO GIC.
The harder question
A business that cannot pay super as it falls due has a cash flow problem that a loan against property will not fix by itself. Clearing the arrears makes sense where the cause was a one-off - a bad debt, a delayed contract, a dispute - and the business can meet payday super going forward. Where it cannot, talk to your accountant and a restructuring practitioner before putting property behind the debt.
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Get matched with a funderFAQ
Is the super guarantee charge tax deductible?
No. Super paid on time is deductible; the super guarantee charge is not, which is one of the real costs of paying late.
Can directors be personally liable for unpaid super?
Yes. Super guarantee charge is covered by the director penalty regime, alongside PAYG withholding and net GST.
Will an ATO payment plan cover super debts?
The ATO can agree to plans for super guarantee charge, but it takes a firm line because the money belongs to employees, and general interest charge continues to accrue.