Advivo answers some Frequently Asked Questions on the superannuation guarantee including, what it means for employers, the significant charges for getting it wrong and how to avoid them.
With Single Touch Payroll now in place, the Australian Taxation Office (ATO) has access to Superannuation information right away. What does this mean for business owners? If Superannuation Guarantee contributions aren’t made on time, employers risk receiving Superannuation Guarantee Charges (SGC), which included harsh penalties.
We have had many enquiries following these changes, so we have put together a list of commonly asked questions to help! Of course, we invite you to give our Bookkeeping and Payroll experts a call on 07 3226 1800 at any time if there is something you are not sure about.
What is the Superannuation Guarantee?
A superannuation guarantee is a compulsory amount that an employer must pay into an employee’s chosen super fund as part of their employment conditions.
When do employers need to pay the Superannuation Guarantee?
Employers have until 28 days after the end of each quarter to make the superannuation guarantee payment for their employees. If the payment is not made by the due date or not paid into the employee’s nominated superannuation fund, then employers must pay the SGC to the ATO.
|Superannuation Periods and Due Dates|
|Quarter||Period||Payment Due Date|
|1||1 July – 30 September||28 October|
|2||1 October – 31 December||29 January|
|3||1 January – 31 March||28 April|
|4||1 April – 30 June||28 July|
When a due date falls on a weekend or public holiday, the payment can be made on the next working day.
Payments can also be made more regularly than quarterly. For example, fortnightly or monthly, so long as the total Superannuation Guarantee obligation for the quarter is paid by the due date.
What if a payment is missed?
If you haven’t paid the minimum Superannuation Guarantee amount on time and to the correct fund, you may have to lodge a SGC statement and pay the Superannuation Guarantee Charge (SGC).
If you pay late, you may be able to use the late payment either to offset the SGC or to carry forward as a pre-payment of a future contribution for the same employee. You must still lodge an SGC statement and pay the balance of the SGC to the ATO.
What makes up the Superannuation Guarantee Charge (SGC)?
The SGC is a non-tax-deductable charge made up of:
- The Superannuation Guarantee shortfall amounts (including any choice liability calculated on your employee’s salary or wages
- Interest on those amounts (currently 10%), which is charged from the start of the period for which the superannuation amount relates, to the date the SGC Statement is lodged; and
- An administration fee of $20 per employee, per quarter.
What happens if an employer does not pay the Superannuation Guarantee Charge?
The ATO maintains that if an employer doesn’t work with them to pay SGC debts, it may take actions that can include:
- Conducting an SGC audit to determine the employer’s unpaid super debt
- Issuing a ‘director penalty notice’ which makes the director of a company personally liable for the unpaid super amount
- Sending a ‘garnishee notice’ to a person who owes the employer money and requiring them to pay any funds owed to the employer, or a portion of them, to the ATO instead.
Let the Experts Handle your Bookkeeping and Payroll!
We at Advivo Accountants & Advisors understand that this can be overwhelming when you just want to get on with running your business, which is why it is essential that this is handled correctly from the beginning, avoiding significant penalties that can be applied for getting it wrong. We have Bookkeeping and Payroll experts onsite to keep your records accurate and accessible to guarantee you are effectively using your time. Call us on 07 3226 1800 or email our bookkeeping team: firstname.lastname@example.org
Located in Brisbane, we’ll take your business to the next level!
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