Under the current Superannuation guarantee legislation, as an employer you are required to make superannuation contributions on behalf of your employees to their complying superannuation fund every quarter. The due dates for these payments are the 28th day after the end of the quarter. Therefore the relevant deadlines for your payments are:
- 28 October;
- 28 January;
- 28 April; and
- 28 July.
You need to be aware that if superannuation contributions are not made by these deadlines, you as the employer become liable for an additional Superannuation Guarantee Charge (SGC), which can result in a significantly higher amount to pay.
There will also be additional paperwork for you to prepare in order to satisfy the requirements of the SGC.
There is an SGC Statement which has to be completed and lodged with the ATO when super payments are not made on time. The SGC Statement is to be lodged on or before the 28th day of the month after the due date for payment of the superannuation contributions. For example, for the quarter ending 31 March, the SGC Statement would be due on 28 May.
When you lodge Super contributions late, the SGC Statement requires you to pay all of the following amounts to the ATO:
- The late contributions in respect of the employees plus;
- An administration fee (per employee); and
- A nominal interest component.
These charges apply should you be even a few days late in making superannuation contributions.
Let’s look at a scenario - For example, you are experiencing cash flow difficulties but as soon as cash flow permits, make catch-up superannuation contributions to the fund. Then it’s important you understand, that you are still subject to the SGC on these contributions - even though you have made good the required contributions. You are also still required to lodge an SGC Statement with the ATO.
However, the amount payable to the ATO under the SGC Statement is reduced by any amount paid directly to the superannuation fund.
In addition, the full amount of the SGC is considered a non-deductible expense for your business. This includes any amounts paid directly to a superannuation fund after the due date. Don’t forget there is also the potential imposition of nominal interest under the SGC for the period through to the date the SGC Statement is actually lodged.
The ATO has increased its scrutiny of SGC and other employment related obligations in recent times. As a result, there is a real risk of review by the ATO for employers who have made late contributions and haven’t lodged the SGC statement or the additional amounts payable.
Don’t be late paying your super contributions – Ensure they are paid on time every quarter to avoid the extra penalty cost and paperwork.