Super Guarantee Charge (SGC) Exposure Calculator
Estimate the SGC exposure — shortfall, 10% nominal interest and penalties — if a contractor engagement is reclassified as employment.
Modelled on the Superannuation Guarantee Charge (SGC): SG shortfall + nominal interest currently fixed by law at 10% p.a. (simple interest from the start of the underpaid quarter, non-reducible/non-waivable) + a $20-per-employee-per-quarter admin fee (not modelled here, since this engine works from gross income, not headcount). There is NO statutory limitation period on SGC assessment, but in practice the ATO does not usually pursue shortfalls beyond 5 years because employers are only required to keep SGC records for 5 years — hence lookbackYears=5 as a practical, not legal, ceiling. On top of the SGC, the Commissioner can also raise a Part 7 penalty of up to 200% of the SGC (commonly remitted in practice) and separate PAYG-withholding failure-to-withhold penalties. Separately, sham contracting under Fair Work Act s357 carries its own civil penalties (up to $19,800 per contravention for an individual, $99,000 for a small business, or the greater of $495,000 / 3x the underpayment for larger employers) — not included in this shortfall+interest figure, which only estimates the tax/super side.
What reclassification really costs you
If a contractor engagement is later found to have really been employment, the Superannuation Guarantee Charge (SGC) is the main mechanism the ATO uses to claw back unpaid super — and it's deliberately punitive. The SGC is calculated as the super guarantee shortfall (based on the 12% rate that should have applied) plus nominal interest fixed by law at 10% per annum, calculated as simple interest running from the start of the underpaid quarter. That interest rate is set in the legislation itself — it isn't reduced or waived for hardship, and there's also a $20-per-employee-per-quarter administration fee that this calculator doesn't model, since it works from gross income rather than a headcount.
On top of the SGC itself, the Commissioner can raise a further Part 7 penalty of up to 200% of the SGC amount (commonly remitted in practice, but not guaranteed), plus separate penalties for failing to withhold PAYG. If the engagement also involved sham contracting under section 357 of the Fair Work Act, there are additional civil penalties entirely separate from the tax and super side.
How to use this calculator
- Enter the wages that should have attracted the Superannuation Guarantee
- Choose how many quarters or years the underpayment covers
- Review the SGC shortfall plus the 10% p.a. nominal interest calculated on it
- Check the Part 7 penalty range and Fair Work sham-contracting penalty figures shown alongside
