Key takeaways
- •An Australian Taxation Office letter warning of a possible super guarantee shortfall is known as a nudge letter, and the ATO says it is not an assessment and does not impose a penalty.
- •A super guarantee nudge letter comes from ATO data matching, which compares payroll reports with super fund records, so it can flag a reporting error or a payment made a few days late.
- •Paying super to the fund late does not cancel the superannuation guarantee charge under the quarterly rules, according to tax specialist Nitin Saby, and those rules cover earnings paid up to 30 June 2026.
- •A confirmed quarterly super shortfall costs more than the unpaid super, because the superannuation guarantee charge adds nominal interest of 10% a year and $20 per employee, and it can run across several quarters.
- •Directors can become personally liable for an unpaid superannuation guarantee charge through a director penalty notice, and if the charge was reported late or never, only full payment by the company remits the penalty.
- •A short-term business loan from Secured Lending, from $250,000 and secured by a mortgage over real property, can give your company the funds to pay a confirmed shortfall and can settle within 24 hours.
If your company has received a letter from the Australian Taxation Office headed "Your data shows you may not have met your quarterly super guarantee (SG) obligations", it is natural to read it as a bill, particularly as it can tell you that you may need to lodge a statement and pay. The ATO says the letter is not an assessment and does not impose a penalty, although a letter that goes unanswered can still lead to an audit.
These letters have drawn attention in recent weeks, from accountants and at a Senate hearing on 28 October 2026. For a company director, the more useful question is a practical one: is the shortfall real, and if it is, how much is it and where will the money come from?
Your accountant can answer the first part. If the shortfall turns out to be real and your company does not have the cash, we would be glad to help. A short-term loan backed by property can give your business the funds to pay it, and any other ATO debts, in one go.
What the letter is, and what it is not
The letter comes from data matching. The ATO collects payroll information through Single Touch Payroll and contribution information from super funds, then compares the two. Where the data suggests a possible shortfall, it may send a nudge letter asking the employer to review its records, correct any reporting errors and, where necessary, bring contributions up to date, as Accountants Daily reported in September.
People disagree about how that letter reads. In the same report, Eddie Griffith, chairman at the Affiliation for Business Restructuring and Turnaround, described the letters as a demand for payment and as aggressive. The ATO's statement to Accountants Daily in October put it this way: "A nudge letter is not an assessment of SG, nor does it impose penalties. A nudge letter also does not automatically escalate to an audit."
The same statement carries the other half of the ATO's position. An employer can voluntarily disclose unpaid super by lodging a super guarantee statement. If an employer does not review its position and a later audit finds it failed to meet its obligations, assessments may be made and penalties applied. So the letter does not create a debt, but it is a good reason to find out quickly whether your company has one.
Why a company that paid can still receive one
You may be sure the super was paid, and you may be right. Accountants Daily reported that at the Senate hearing, the ATO's Second Commissioner, Jeremy Hirschhorn, accepted that data can contain errors, and said the ATO's general approach is to show taxpayers the data and let them act on it or explain the discrepancy. The letter itself names reporting errors as a possible cause of incorrect information, and says you may need to fix them.
The harder case is super that was paid, but late. Nitin Saby, managing director of Saby Group & Co, told Accountants Daily in November that a mismatch of even a day or two can be flagged as a potential shortfall. He also explained that under the quarterly rules, paying the fund late does not cancel the liability, which arises at the missed deadline. One of his clients, who owns restaurants in Melbourne, paid super a little late because of cash flow. When his firm tried to negotiate the 10% interest, he said, the ATO would not reduce it.
The quarterly rules are the ones that matter here, because the letter refers to quarterly obligations. They apply to earnings paid up to 30 June 2026. Paydays since 1 July 2026 fall under Payday Super, and our guide to what each delay costs under Payday Super covers those.
Your accountant's review comes first
Before anyone talks about money, your accountant or tax agent needs to compare your payroll records and contribution receipts with what the letter says, quarter by quarter. We are a lender, and we do not give tax advice. Whether a shortfall exists, whether to lodge a statement and how any penalty might be treated are questions for your accountant.
That review also gives you the figure a funding decision depends on. It tells you which quarters are affected, what is owed for each one and whether the amount sits alongside other ATO debts.
What a confirmed shortfall can add up to
Once a shortfall is confirmed, the cost is more than the super that was missed. HLB Mann Judd's guide to late super payments, published in March 2024 and written for the quarterly rules, sets out three parts: the shortfall itself, nominal interest at 10% a year, and an administration component of $20 per employee. The firm's example is $50,000 of super paid late for 30 employees, which adds $6,250 of nominal interest over 15 months and a $600 administration component, for a $56,850 liability before any penalty. It says the ATO has limited to no discretion to reduce the interest or administration components, and that the charge is not tax deductible.
If your company has already paid the super late, not all of that liability may still be owing. In the firm's example, the late payment is used as an offset to reduce the amount owed. That offset has limits, though: under the Payday Super legislation, it is not available for the quarter ending 30 June 2026, or for contributions made on or after 1 July 2026 for an earlier quarter. Your accountant can work out what applies to each of your payments.
Those figures are for a single example, and the letters can cover far more. Accountants Daily's September report described examples with quarters going back to September 2021, one listing 19 consecutive quarters and another showing a shortfall of more than $96,000 across 67 employees in a single quarter. HLB Mann Judd also notes that the usual two-year and four-year review periods do not apply to super, so an old quarter can still be reviewed.
Then there is the penalty reported in the news. The same guide describes the Part 7 penalty as starting at 200% of the liability where the ATO discovers the late payments in a review, with the ATO's discretion required to reduce it. The ATO confirmed to Accountants Daily that the top rate of 200% may apply to outstanding liabilities. The guide's view is that voluntary disclosure is the best way to deal with late super, so if your accountant recommends it, it helps to have the funding arranged before any audit begins. Your accountant can tell you how the penalty rules apply to your company.
What it means for you as a director
The charge does not always stay with the company. Unpaid superannuation guarantee charge is one of the debts the ATO can recover from directors personally through a director penalty notice. Under the director penalty rules in the Taxation Administration Act 1953, where the charge was reported after its due date or never reported, the only way to have the director penalty remitted is for the company to pay the liability in full. Our guide to a lockdown director penalty notice explains how that differs from a standard notice.
So whether the company can pay in full also matters to you personally. If it cannot pay its debts as they fall due, a loan does not answer that question: we do not give insolvency advice, and we can connect you with insolvency specialists in our network.
How a short-term loan funds a confirmed shortfall
Where the shortfall is real and the cash is not there, a private loan gives your company the money to pay it in full. Your company is the borrower, the loan funds are paid to it at settlement, and it then pays the ATO itself. One loan can cover superannuation guarantee charge together with income tax and business activity statement debts, so the shortfall does not have to be funded separately from everything else the company owes.
The loan is secured by a first or second mortgage over residential, commercial or industrial property. That can be property your company owns, or a director's home or investment property. The main terms are:
| Who can borrow | Companies, including a company acting as trustee. We do not lend to individuals or sole traders |
| Loan size | From $250,000 |
| Interest rates | From 9.7% p.a. on tax debt loans, and from 11.95% p.a. on a second mortgage |
| Loan-to-value ratio | Up to 70% of the property's value, across all loans on the property |
| Term | 1 to 24 months, usually 3 to 6 months |
| Speed | A decision in hours, and settlement possible within 24 hours |
The loan is repaid through an exit agreed before settlement, such as a refinance or a property sale. You may also be weighing up an ATO payment plan, which spreads the debt over time. A loan replaces that with one payment to the ATO and a defined date for repaying us. A live ATO debt is not on its own a reason for us to decline, and if a notice has already arrived, our page on a short term loan to pay an ATO debt covers that timetable.
Case study: $650,000 to resolve an ATO debt and keep working capital
A growing business had outstanding ATO liabilities and also needed ongoing cash flow for its operations and growth. Its directors wanted to resolve the debt without affecting day-to-day trading.
We provided a $650,000 first mortgage loan to the business, secured against a residential property owned by a director and valued at $1.4 million, an indicative loan-to-value ratio of 46%. The exit was a refinance supported by improved business cash flow.
The business met its ATO commitments, kept trading without disruption and put a longer-term finance strategy in place.
Frequently asked questions
The letter lists quarters going back years, and I am sure we paid. Do we have to pay what it says?
The letter is not an assessment, so it does not itself create a debt. Your accountant can compare your records with the ATO's data, and the letter names reporting errors as a possible cause of incorrect information.
What happens if I do nothing about the letter?
The ATO says a nudge letter does not automatically lead to an audit. It also says that if an employer does not review its position, assessments may be made and penalties applied if a later audit finds it did not meet its obligations.
We paid the super a few days late because of cash flow. Can the ATO waive the interest?
Your accountant is the right person to ask, because it depends on your records. HLB Mann Judd says the ATO has limited to no discretion to reduce the nominal interest, and in the Melbourne example reported by Accountants Daily, the ATO would not reduce it.
Can one loan cover several quarters of super and our BAS debt?
Yes. One loan can cover superannuation guarantee charge across several quarters together with BAS and income tax debts, as long as the total stays within 70% of the property's value and the loan is at least $250,000.
The company owns no property, but I own my home. Can it still borrow?
Yes. Your company is the borrower, and a director's home or investment property can secure the loan. The funds are paid to your company, which then pays the ATO.
How Secured Lending Can Help
If your accountant has confirmed a shortfall and your company does not have the cash, we would be glad to help. Our loan gives your company the funds to pay the ATO, secured by property your company or a director already owns, and it is repaid through an exit agreed at the start.
We lend our own funds, so nothing waits on another funder. In most cases we can tell you within hours whether we can proceed, issue a letter of offer as soon as terms are agreed, and settle within 24 hours.
If you would like us to look at your situation, it helps to have these to hand:
- •The ATO letter, and your accountant's figure for each affected quarter.
- •Any other amounts your company owes the ATO.
- •The property that could back the loan, its estimated value and any existing loan on it.
- •How your company plans to repay the loan, and roughly when.
You are welcome to call us on 1300 795 175 to talk it through, or send the details through and we will come back to you. Your accountant is welcome to call us too.
