An employer is obligated to pay super guarantee (currently at 9.5%) for their employees by the designated due dates. Harsh penalties exist in order to discourage late payment and protect the retirement funds of employees.
With Single Touch Payroll now mandatory, the ATO’s ability to identify those employers who do not pay their super obligation has never been greater. It is therefore imperative that employers understand how they could be penalised for late payments of super and the options available to minimise the consequences. Employers who do not pay super guarantee on time will be liable for the superannuation guarantee charge (SGC). The charge is equal to the sum of:
- the superannuation guarantee shortfall (i.e. the super not paid)
- an interest charge of 10% per annum
- an administration charge of $20 per employee per quarter where there is a shortfall
A tax deduction is not available for the superannuation guarantee charge. Where an employer has missed super guarantee payments by the due date, they must complete a Super Guarantee Charge Statement. The due dates for lodgement and payment are set out in the table below.
|Quarter||Period||Due date for SG payment||Due date for lodgement of SGC Statement|
|1||1 July – 30 September||28 October||28 November|
|2||1 October – 31 December||28 January||28 February|
|3||1 January – 31 March||28 April||28 May|
|4||1 April – 30 June||28 July||28 August|
If an employer fails to lodge the SGC statement on time, they may be subject to an additional penalty of up to 200% of the amount of SGC.
Be upfront and avoid penalties
For a limited time only, the ATO have introduced a super guarantee amnesty period. This is a one-off opportunity until 7th September 2020 to disclose any unpaid super and avoid administration charges during the amnesty period. A deduction for the SGC can also still be claimed for late super paid during this period. Time is quickly running out, so speak to an FAJ accountant now to take advantage of this amnesty.
Other related blogs: