As an employer, you must make super payments for anyone who is employed under you into their nominated super fund. As of 1 July 2021, the super guarantee rate has increased to 10%.
If you have missed a super payment for your employees, or haven’t paid it on time (or to the right fund), you must lodge the superannuation guarantee charge (SGC) statement, and pay the SGC to the Australian Taxation Office.
Late super payments (in the event that eligibility requirements are met) may be used to offset the SGC, pay super during the current quarter or put the payment towards future super payments. The SGC is not tax-deductible though, so you will need to take that into account as an employer as it is not a super contribution payment that you can claim back on your tax.
Missed Super Guarantee Rate Payments
A missed super guarantee payment might occur because of circumstances beyond your control, or a situation that arises. If you fail to pay an employee’s super on time, or into the correct nominated super fund, you must:
- Lodge a superannuation guarantee charge statement
- Pay the super guarantee charge
The due date for the super guarantee every quarter cannot be extended legally. This means that to avoid penalties, you will need to ensure that you have lodged the SGC statement (or had us help you with the process) within a month of the quarterly due date and the SGC for the outstanding super.
Late Super Guarantee Payment Options
If you have made a late super payment to an employee’s super fund, you may be able to:
- elect to claim the late super payment offset, which will reduce the SG shortfall and nominal interest of the SGC.
- Pay super in the current quarter
- Put the payment towards future super payments (limited to a period of no more than 12 months from the beginning of the quarter).
So what might happen if you fail to pay a super guarantee payment or pay it late to an employee’s super fund? The ATO may determine that certain penalties might need to be put in place if you do not attempt to rectify the situation. They may be more likely to reduce or waive the penalties if you have a good compliance history with the ATO, and make a genuine attempt to meet your super guarantee obligations.
If you’re concerned that you may not be able to meet the super guarantee payments required by you by law, it might be best to start a conversation with us as soon as possible, as we might be able to assist.