June Update

Your employee’s super contribution is only considered ‘paid’ on the date it’s received by the super fund. Not the date it’s received by the clearing house.

In light of this we encourage employers to make their payments at least 3-5 working days before the due date.

Payments for the June quarter (Apr through to June) are due no later than July 28th.

With Single Touch Payroll and reporting from Super Funds, the ATO is now able to identify late superannuation payments and will contact employers in breach.

Significant penalties will apply.

From 1 July 2021, employers will be required to increase their employees’ superannuation guarantee contributions to 10% of their Ordinary Time Earnings.

Under the current legislation, these increases will continue to rise by 0.5% each year until 2025, at which time superannuation guarantee contributions will reach a minimum of 12% of an employee’s Ordinary Time Earnings.

Payment Dates

With the ATO amnesty on Superannuation payments no longer in effect, it is absolutely critical that your superannuation payments for Employees are made before the due date as it can take up to a week to process.

Superannuation due dates for the remainder of the year are:

Why does it matter if I am late?

There are significant penalties and interest payable, even if you are just late by 1-2 days. This includes;

• General Interest at 10%
• Superannuation payable on all earnings (not just Ordinary time)
• Administrations fees of $20 per person per quarter
• Penalties of up to 200% of total superannuation payable for your employees
• These penalties are not tax deductible

By Law, if your payment is made late or you pay the wrong amount, you must complete and lodge a Superannuation guarantee charge statement and pay the SGC charge as soon as possible.

The ATO are showing no leniency in this area. With the ATO receiving payroll information from all employers via the single touch payroll reporting, they are able to data match against the super stream records to determine any incorrect amounts or payments not made.

Failure to identify & report a late or incorrect payment will result in additional penalties being applied with these backdated to the original due date. As one employer found out just recently.

A recent case reported by the ATO identified an employer who only paid a portion of their quarterly superannuation liability on time. They paid the balance a week later. The amount paid late was $140,000. As the employer failed to also lodge a SGC report to identify & declare this, fees and penalties were applied. The payment required to be made by the Employer was just over $550,000. This was nearly 4 times the original amount due for being 1 week late.

It is critical that superannuation payments are made before the due date and for the full amount due.

Like we do at Plus 1, Employers can choose to make payments more regularly, such as monthly or fortnightly to help ease the cash flow burden and reduce the risk of not paying on time.

Regardless of how payments are made, ultimate responsibility for ensuring they are paid on time, accurately and into the correct superannuation funds, always rests with the Employer.

To this end, we highly encourage all employers to;

• establish an internal system to identify these due dates
• to verify that payments are made by the due date,
• to verify that the correct payments are made
• to identify any issues and report discrepencies to the ATO sooner rather than later , as this may help to mitigate some of the costs
• to verify all of these tasks above if they are undertaken by staff.

Run a quick check on your Super Obligations

• Check you’re paying super to all eligible workers.
  Some contractors may be entitled to super.

• Check you’re paying the right amount.
  Currently, you need to pay a minimum of 9.5% of their ordinary time earnings (changing to 10% as of July 1st 2021).
  Along with this, check you are paying your employee the correct wages, as underpayments of wages will also incur superannuation penalties.

• Check you’re paying on time.
  It’s tax deductible against your business income.
  At a minimum, pay super quarterly.
  If you don’t pay on time, you need to pay a superannuation guarantee charge, which is not tax deductible.

• Check you’re paying to the right place.
  Pay super into your worker’s fund of choice.
  If they haven’t given you the details, pay it into your default fund.

• Check you’re paying the right way.
  Pay the SuperStream way – where both payments and data are sent electronically in a standard format.
  You may be able to use the free Small Business Super Clearing House to distribute payments to your employees’ super funds.
  Single Touch Payroll is the next step in streamlining your payroll reporting.

• Check you’re keeping accurate records.
  Keep evidence to show you’ve met your obligations.