Managing superannuation payments is a critical responsibility for Australian employers. Failure to pay the Super Guarantee (SG) on time can result in significant penalties and additional charges. This guide will help you understand the consequences of missed and late super payments, and provide practical steps to rectify these issues. Using the Australian Taxation Office (ATO) as a primary resource, this article is designed to be educational and practical, including step-by-step instructions and free tools available.
What Are Missed and Late Super Guarantee Payments?
Missed and late super guarantee payments occur when employers fail to pay their employees’ super contributions to the correct super fund by the due date. According to the Australian Taxation Office (ATO), an employee’s super contribution is considered ‘paid’ only when it is received by the super fund, not when the payment is made to a clearing house .
Why Is Timely Payment of Super Important?
Timely super payments are crucial for several reasons:
- Compliance with the Law: Employers are legally obligated to pay the super guarantee on time. Failure to do so results in the Superannuation Guarantee Charge (SGC), which includes the shortfall amount, nominal interest, and an administration fee.
- Financial Penalties: Late payments can lead to substantial penalties. The SGC is not tax-deductible, adding to the financial burden on the employer.
- Employee Trust and Satisfaction: Consistent and timely super payments foster trust and satisfaction among employees, contributing to a positive workplace culture.
4 Steps to rectify missed and late Super Guarantee Payments
1. Calculate the Super Guarantee Charge (SGC)
To begin rectifying missed or late super payments, calculate the SGC. This includes the following components:
- Super shortfall amount
- Nominal interest (10%)
- Administration fee ($20 per employee per quarter)
2. Lodge an SGC Statement
Next, you must lodge an SGC statement with the ATO. This statement can be completed and submitted online via the ATO’s Online services for business:
- Attach the completed SGC statement spreadsheet to a secure mail message.
- Select ‘Superannuation’ as the topic.
- Choose ‘Lodge SGC statement’ as the subject.
If you cannot lodge online, contact the ATO on 13 10 20 for alternative options.
3. Pay the Super Guarantee Charge
Make the SGC payment to the ATO. Note that this charge is not tax-deductible and must be paid in full to avoid further penalties.
4. Offset Late Super Payments
If you have already made a late super payment, you may be able to offset it against the SGC. To qualify for this offset, ensure that:
- The payment was made to the employee’s super fund before the original SGC assessment date.
- You lodge a late payment offset election through the SGC statement within four years of the original SGC assessment date.
Conclusion
Timely super guarantee payments are essential for legal compliance and maintaining a healthy employer-employee relationship. By following the steps outlined in this guide, you can rectify any missed or late super payments and avoid significant penalties. For further assistance, consider utilising the services provided by TLS BAS & Bookkeeping to ensure your business remains compliant with superannuation laws.
Resources: Australian Taxation Office – Super for employers
