• If contributions aren’t made in full or on time, a revamped Superannuation Guarantee Charge (SGC) will apply. 
• The SGC includes the unpaid super based on Ordinary Time Earnings (OTE), interest to compensate employees for the delay, and an administration fee. Exceptions to this will include: 
  • new employees, where employers have an additional 14 calendar days to make a contribution, unless the next pay cycle occurs within the 14 days
  • incorrect stapling, where the stapling request is rejected by the ATO, extending the total period to 42 days
  • out-of-cycle SG contributions, such as bonuses, commissions, advances and back payments
  • exceptional circumstances where the ATO Commissioner may grant extensions.
• The SGC will be tax deductible (currently it is not). However, penalties will remain non-deductible.
• The SGC administrative fee is currently $20 per employee per quarter. Under the proposed legislation, this will be calculated up to a cap of 60% of the SG shortfall.
• The current interest component of the SG charge is 10% per annum. Under the proposed legislation, the SG shortfall will incur a General Interest Charge on a compounding basis.

The ATO will have additional resources to detect unpaid super cases sooner and act more quickly when an unpaid super complaint is submitted.

The draft legislation introduces a new definition of Qualifying Earnings (QE). QE refers to the earnings on which employers are required to make superannuation contributions under the Payday Super reforms. Essentially, it's the amount paid to employees that includes:

• Ordinary Time Earnings (OTE): Regular wages and salaries. 
• Salary sacrifice super contributions: Contributions made from an employee's pre-tax income. 
• Other amounts: Any other earnings currently included in an employee's salary or wages for SG purposes.

Employers must ensure that super contributions are received by their employees' super funds within 7 calendar days of the QE payment.