Employers will soon lose the ability to reduce their Super Guarantee Charge (SGC) liability through the late payment offset (LPO). The ATO has confirmed the LPO will be abolished from 31 March 2026 as part of the broader Payday Super reforms. Here is what you need to know and what to do now.
What Is the Late Payment Offset?
The LPO allows employers who make late super contributions to reduce their SGC liability when lodging an SGC statement. To qualify, all of the following conditions under section 23A of the Superannuation Guarantee (Administration) Act must be met:
- The payment is made more than 28 days after the quarter ends but before the ATO’s assessment.
- The employer lodges an SGC statement and makes an LPO election in the approved form.
When applied, the LPO is first offset against nominal interest, then against the employee SG shortfall. Importantly, the $20 per-employee administration fee cannot be reduced by LPO and remains payable regardless.
Key Dates to Know
- 31 March 2026: Last quarter for which the LPO may be applied (under s 23A of the SGAA).
- 28 April 2026: SG payments for the March 2026 quarter become due.
- 30 June 2026: Last date to claim LPO when lodging an SGC statement for late payments made up to this date.
- After 30 June 2026: LPO is abolished. It will no longer reduce SGC liabilities.
What About the June 2026 Quarter?
For the quarter ending 30 June 2026, the ATO has advised that any SG payments made between 1 and 28 July 2026 will first be applied to reduce any outstanding SG shortfall before being attributed to Payday Super obligations. Employers should reconcile any shortfall carefully for this transitional quarter.
What Should You Do Now?
We recommend taking the following steps before the deadline:
- Review your payroll systems to ensure they can support the new Payday Super processing requirements.
- Pay on time and in full for all quarters leading up to the system change. Late payments remain non-deductible even if they reduce total SGC.
- Note that LPO cannot be used across different quarters or under other SGAA reduction provisions.
Contact us immediately if you anticipate or identify an SG shortfall. We can help you minimise penalties and lodge SGC statements correctly.
Need Help? We Are Here.
If you have any concerns about your super guarantee obligations or upcoming changes under Payday Super, please contact our office. We are here to help you remain compliant and avoid unnecessary penalties.[email protected]