The ATO is now diligently examining super guarantee (SG) contributions, ensuring not only their completion but also their timeliness. Employers who are late or non-compliant in their contributions are quickly identified and contacted by the ATO.
Methods ATO use to detect Late Super Payments
One key area of investment has been in enhancing data matching systems. With the advent of Single Touch Payroll (STP) Phase 2 and improved data-matching programs, the ATO now has more comprehensive data on employers’ SG contributions. This advancement leads to faster and more effective follow-ups on non-compliance.
A Key Trap for Employers
A key oversight is the processing times from when the employer, or their bookkeeper, initiate / approve the SG payment through their accounting software / clearing house.
There is usually a lag of around 7 days from when the payment is made by the employer and the funds received by the employee’s superannuation fund. So, when the SG payment is made close to the due date, the receipt of the funds by the employee’s superannuation fund is usually late.
If the funds are received late by the superannuation fund, this will result in a requirement to pay the Super Guarantee Charge (SGC) outlined below.
Super Guarantee Charge (SGC)
Failure to pay the full SG amount on time results in the imposition of the SGC, which includes the SG shortfall, nominal interest charged up until lodgement of an SGC form (currently at 10%), and an administrative fee ($20 per employee, per quarter).
In addition to the above penalties any superannuation amounts paid late and subject to SGC are no longer tax deductible in your income tax return.
Avoiding SG Issues
Initiating SG payments early is crucial to ensure the timely receipt of SG contributions before the due date. We recommend initiating SG payments on the 15th of the month when they are due, to ensure businesses meet their SG obligations on time.
Assistance with Your SG Obligations
For businesses needing help with super obligations or for advice on managing SG payments, please contact your accountant / team member at Accura or on admin@accura.com.au or call 9387 0000.
