Short answer: Unpaid wages are enforced by the Fair Work Ombudsman and can reach directors and managers personally. Unpaid super is enforced by the ATO through the super guarantee charge, which now adds lost earnings and an uplift of up to 60%. Paying before the ATO assesses you cuts that bill sharply, so fund the catch-up early and in one hit.
Two debts, two regulators
Falling behind on payroll creates two separate problems, and they don’t share an enforcer. Wages and entitlements belong to the employee, and the Fair Work Ombudsman polices them. Super belongs to the employee’s fund, and the ATO polices it. Fix one and you have not fixed the other.
Employees must be paid at least monthly, and given a pay slip within one working day of being paid. Super must now reach the fund within a set window of payday, which is covered below. Here is who enforces what.
| What is owed | Who enforces | The consequence |
|---|---|---|
| Wages and entitlements | Employee, Fair Work Ombudsman | Compliance notice, then court orders for back-pay, civil penalties and compensation |
| Deliberate underpayment | Fair Work Ombudsman and prosecutors | A criminal offence from 1 January 2025: fines, prison or both |
| Super for earnings paid from 1 July 2026 | ATO | Super guarantee charge: the shortfall, lost earnings, an uplift and possible penalties |
| Super for earlier quarters | ATO | Shortfall, 10% nominal interest and a $20 per employee fee per quarter, none deductible |
| Unpaid charge or PAYG withholding | ATO | Director penalty notice making the debt personal to directors |
Not sure how a missed pay run affects the rest of the business? Our guide to what to do when you can’t make payroll covers the first 48 hours of that problem.
What the Fair Work Ombudsman can do, and who is exposed
Fair Work inspectors can investigate suspected breaches, enter premises, ask for records and issue a Notice to Produce giving at least 14 days to comply. Where they believe a breach has happened, they can issue a compliance notice setting out the breach and the fix, for example a deadline of 28 days to pay what is owed. The Ombudsman can also take a matter to court for civil penalties and orders for compensation (Fair Work Ombudsman).
The part owners underestimate is personal exposure. A person who is ‘involved in’ a contravention is treated the same way as the employer. That covers someone who assisted, caused or knowingly took part in it, and the Ombudsman lists directors, managers, payroll officers and accountants as examples. A court can order that person to pay the entitlements and penalties, and the provisions apply even if the company has been placed into liquidation (Fair Work Ombudsman).
Since 1 January 2025, intentionally underpaying an employee’s wages or entitlements can also be a criminal offence. The Ombudsman is clear that honest mistakes are outside it. That is one more reason to fix a shortfall quickly rather than manage it for months.
Payday Super: what it requires now
Payday Super started on 1 July 2026. Employers now pay super at the same time as wages, and the contribution must be received by the employee’s super fund within 7 business days of payday. Some situations allow longer, such as a new employee’s first contribution.
Two practical points follow. First, ‘received’ means in the fund with the information needed to credit the member, so a payment sent on day seven may arrive too late. Second, every payday now gets its own deadline. Under the old quarterly system you had weeks of slack. Now a missed pay run starts a clock on the next one.
Single Touch Payroll is what makes it visible. From 1 July 2026 you report both qualifying earnings and your super liability through STP. A contribution that is not received within the 7 business days triggers the charge, and the ATO, not the employer, assesses it.
If your problem is the cash-flow rhythm of weekly super rather than a backlog, our guide to Payday Super and cash flow goes through it in detail. This guide is about the backlog.
What unpaid super really costs
Late super turns into the super guarantee charge, and it is deliberately more expensive than paying on time. For earnings paid from 1 July 2026 it has up to four parts (ATO).
- The shortfall. The unpaid amount, based on 12% of qualifying earnings.
- Lost earnings. Interest at the general interest charge rate on the shortfall, compounding daily from the end of the 7-business-day window.
- An administrative uplift. It starts at 60% of the shortfall plus lost earnings, and shrinks the sooner you disclose and the cleaner your history.
- Choice loading, where choice of fund rules weren’t followed.
The ATO then adds penalties, which under the new system are 25% or 50% of the unpaid charge depending on prior penalties. The four components are deductible for earnings paid from 1 July 2026, but the general interest charge and late payment penalties are not. For earlier quarters the old rules still apply: the shortfall, 10% nominal interest and a $20 per employee fee per quarter, none of it deductible.
The uplift is where timing pays off. This is how the ATO says it reduces when you lodge a voluntary disclosure.
| Disclosure lodged | Uplift, no assessment in prior 2 years | Uplift, prior assessment |
|---|---|---|
| Within 30 days | 0% | 20% |
| 31 to 60 days | 5% | 25% |
| 61 to 120 days | 10% | 30% |
| More than 120 days | 25% | 45% |
| Not lodged before assessment | 40% | 60% |
The catch-up route: disclose and pay before the ATO assesses
The ATO’s own advice for a missed Payday Super contribution is short. Pay the outstanding amount to the employee’s fund as soon as possible. A partial payment still reduces the charge. Then consider a voluntary disclosure before the ATO assesses you. You can’t lodge one after you receive a notice of assessment, and under Payday Super you no longer lodge a super guarantee charge statement to report a shortfall (ATO).
Once the notice does arrive, the charge is paid to the ATO, not the fund, and it is due on the day of assessment. If it isn’t paid within 28 days, the ATO issues a Notice to Pay, and a late payment penalty follows if that isn’t paid in another 28.
The size of the saving is the point. In the ATO’s own worked example, paying 25 days late and before assessment cut the maximum charge from $5,869.44 to $69.58. Your numbers will differ, but the direction won’t.
Older quarters
For earnings paid up to 30 June 2026, the quarterly rules apply. The route there is to lodge a super guarantee charge statement and pay. The statement is due one calendar month after the super due date, so the quarter to 30 June 2026 fell due on 28 August 2026 and is already overdue if unlodged.
When the debt becomes personal
If super stays unpaid and unreported, the ATO can estimate it, and a director penalty notice can make the amount personal to the directors. Estimated super is treated as never reported, so only paying it in full remits the penalty. If you hold one already, the guide on the 21 days is the next thing to read.
One plain piece of advice: if more than one pay period is behind, get an accountant or adviser in this week to tell you which periods are which and what the real figure is.
Funding the catch-up in one hit
Paying wages and super late, a bit at a time, is the most expensive way to do it. Every pay run adds a new deadline, the charge grows daily, and the ATO may act before you are done. Clearing everything in one payment and starting clean is usually cheaper and calmer.
- You own property. A property-secured business loan runs from $20,000 to $5M, is assessed on equity and the exit rather than financials, and can fund in as little as 24 hours. The median across our property-secured loans is 36 hours. ATO debt and overdue lodgements don’t stop it.
- No property, trading 6+ months. A cash-flow loan is sized to turnover, needs an active ABN and read-only bank statements, and some fund in as little as 2 hours after approval. See emergency business loans and unsecured business loans.
- Wages are the immediate need. Our page on funding payroll and wages sets out the options by speed.
Build the timeline backwards. Super has to be received by the fund, so allow banking time. Wages are owed to people who may already be asking questions. Funding in a day or two and paying before the ATO assesses is the cheapest window you will get. If the ATO debt has also built up, our guide on paying an ATO debt with property equity compares that route against a payment plan.
When a loan is the wrong answer
A loan fixes a timing problem. It does not fix a business that loses money. Take a company that has missed payroll and super for three pay runs because a big customer paid late, and which is otherwise profitable. This is an illustrative example. A one-off loan, a catch-up and a changed process can put that business right.
Now take a company that has missed six pay runs and is still losing money each month. Borrowing against a home to catch up may buy a few weeks and put the home at risk. In that case speak to your accountant and an insolvency practitioner before you borrow, because directors can be personally exposed on both wages and super.
The test is the same as for any secured loan: is there a dated event that repays it, such as a customer payment, a refinance or a sale? If yes, catching up in one hit is usually the right move. If no, get advice first. We would rather tell you that than write the loan.
Check how fast you can clear the backlog
Every pay run you leave open adds interest, a new deadline and a bigger conversation with an inspector or the ATO. If the backlog is real, work out the total first: wages owed, super owed, and any ATO balance already issued. Then see what you can fund against it. Our pages on urgent business loans explain how fast each option moves.
The 60-second eligibility check makes no credit enquiry and costs nothing. Add the figure you need and whether you own property, and you will know whether you can pay your people and the ATO this week.
Frequently asked questions
How late can I pay super before it triggers the super guarantee charge?
For earnings paid from 1 July 2026, super must be received by the employee’s fund within 7 business days of payday. Contributions that arrive after that are late and can trigger the charge when the ATO assesses.
Can I pay unpaid super straight to the fund?
Yes, and the ATO says to do it as soon as possible. A partial payment still reduces the charge. Once the ATO has issued a notice of assessment, though, the charge is paid to the ATO instead.
Is the super guarantee charge tax deductible?
It depends on the period. Under Payday Super, the components are deductible for earnings paid from 1 July 2026, but the general interest charge and late payment penalties are not. For quarterly periods before that date the charge is not deductible.
Can a director be personally liable for unpaid wages?
Yes. Directors and managers who are knowingly involved in a contravention can be treated as if they were the employer and ordered to pay entitlements and penalties. For unpaid super, a director penalty notice can make the debt personal.
Can I get a loan to pay wages and super when I am behind?
Yes. With property, a secured loan is assessed on equity and the exit, and ATO debt and overdue lodgements do not stop it. Without property, a cash-flow loan needs 6+ months trading and bank statements.
Does it cost anything to apply?
No. There's no cost to apply or check your eligibility. All costs are set out in writing in your loan offer before you sign anything.
Will checking my eligibility affect my credit score?
No. Our 60-second eligibility check doesn't make a credit enquiry. A credit check is only done later, with your consent, if you decide to proceed.
