In a presentation at the Australian Institute of Superannuation Trustees Chairs Forum, the ATO’s Deputy Commissioner confirmed that as a result of STP, the ATO now has an “unprecedented level of visibility” of super information.
In particular, the ATO’s examination of Super Guarantee (‘SG’) contributions of some 75 million payment transactions for the first three quarters of 2019 (for approximately 400,000 employers) has shown that 90 – 92% of contribution transactions by volume and 85 – 90% of transactions by dollar value were paid on time.
The ATO is now starting to actively use this data to warn employers who appear not to be paying the required SG on time (or at all).
As a result, it has notified 2,500 employers that they have paid their SG contributions late during 2019. Due-date reminders were also sent to a further 4,000 employers.
Employers should be aware that failure to pay your super contribution by the 28th day after the end of the quarter will result in a Superannuation Guarantee Charge (SGC). The SGC is made up of the original super contribution (9.5%) plus interest & penalties. In the event of late payment, you should complete and lodge a SGC statement and pay the amount to the Tax Office rather than the super fund .
Please be aware of the disadvantages if super contributions are not paid on time and the SGC applies. In relation to the SGC, please note the following:
- the super (9.5%)& penalties are not tax deductible;
- the employer must pay notional interest (in place of earnings that would have accrued had the SG contribution been made on time) and an administration fee ($20 per employee, per quarter);
- there are further penalties for late payment and failure to lodge a SGC statement;
- the shortfall in super contributions is based on ‘salary & wages’ which is potentially a higher than Ordinary Times Earnings (OTE); and
- the employer will have to put time into preparing the SGC statement.
In relation to making super contributions on time, we remind you that it is the date the funds reach the super fund that is relevant for determining an ‘on time’ payment. This also applies if you use a clearing house to distribute contributions to your employee’s funds on your behalf. The contributions are counted as being paid on the date the super funds receive payment, not the date the clearing house receives funds from the employer. We recommend that you process you super contributions 10 days prior to the quarterly due date (or otherwise check with your clearing house) to allow enough time for your payments to be processed before the quarterly due date.
Quarterly payment due dates for SG Contributions are outlined below:
Period Due Date
1 Jul – 30 Sept 28 Oct
1 Oct – 31 Dec 28 Jan
1 Jan – 31 Mar 28 Apr
1 Apr – 30 Jun 28 Jul
If you have any queries or concerns in relation to your superannuation guarantee obligations please contact our office.