All employers are reminded that super guarantee (SG) payments must be made to complying funds or retirement savings accounts (RSAs) by the quarterly due dates, which are 28 days after the end of each quarter. The payment must be made in full and reach the fund or account by the due date.
Important: It can take up to 10 working days for super payments to arrive in an employee’s account when processed via Single Touch Payroll providers. Simply processing the payment before the due date is not enough, the SG payment must reach the members account before the due date.
With the introduction of Single Touch Payroll, the ATO can more easily identify employers who have not paid SG. A Superannuation Guarantee Charge (SGC) Statement needs to be lodged with the ATO in situations where superannuation has not reached the super funds before the due date. The SGC is calculated by:
The shortfall amount – which is calculated on employees’ salary and wages, rather than their ordinary time earnings (OTE)
An interest component of 10 percent of the shortfall amount from the beginning of the quarter the contribution was required to be paid until the lodgment of an SGC statement, and
A $20 administration fee per employee.
The SGC can apply and will accrue irrespective of whether the failure to make SG contributions in full is deliberate or an inadvertent mistake or a misunderstanding.
In addition to having to pay the SGC, employers should be aware of the other potential penalties and consequences of not meeting their super obligations:
The entire SGC amount (that is the shortfall, the nominal interest and the administration charge) is not tax deductible
General interest charges also accrue on the SGC until it is paid
The ATO can impose other penalties. For example, the maximum penalty for failing to provide an SGC statement when required is 200 percent of the SGC payable
Directors of a company that fails to meet an SGC liability in full by the due date can become personally liable for a penalty equal to the unpaid amount.
We would encourage all clients that receive a letter from the ATO and are unsure where they stand in relation to their superannuation guarantee obligation to contact our office immediately on 03 9584 2277.