Late or Unpaid Employee Super
It’s important for employers to educate themselves and/or seek assistance to remain compliant where employee super is concerned. Apart from taking care of their employee’s future nest egg, it’s compulsory by law and comes with significant consequences if paid late or not paid at all.
If an employee reports you for unpaid super, the ATO will start an investigation on their behalf. Rest assured the ATO’s reach is broad, and this investigation could potentially lead to a closer look at your business. Something we all want to avoid!
If you do not pay an employee’s minimum super guarantee amounts or fail to pay them on time, you may need to:
- Lodge a Superannuation Guarantee Charge statement and
- Pay the Superannuation Guarantee Charge
The Superannuation Guarantee Charge consists of:
- The Super shortfall
- Possible additional Super – a fact not widely known is that the Super Guarantee Charge is calculated on ‘Wages’ rather than ‘Ordinary Times Earnings’. This means the business becomes liable to pay super on payroll amounts that do not usually attract super. An example of such an item is overtime. These additional amounts can be sizeable and quickly inflate your liability unnecessarily.
- Interest on the unpaid/late amounts
- Administration Fees
It is advisable to lodge such statements so in the event of an audit you are on a better footing in regard to your late payments.
Audit activity by the Australian Taxation Office is ramping up in this area. We therefore advise every effort be made by you to pay your superannuation contributions on time.
The deadline for superannuation is that it must reach employees superannuation funds by the 28th day after the quarter ends, i.e. by 28th January, 28th April, 28th July and 28th October.
This means that you need to pay super by the cut-off dates advised by your Super Clearing House in order for them to be able to process the payment across to your employees Super Funds in time to meet the deadline.
In most cases the cut off is at least a week before the due date. It is suggested to aim to have superannuation paid by say the 20th days of the month it falls due to cater for this.
This can be an overwhelming area for employers. If you are experiencing difficulties and need a helping hand, contact the Beam Team.
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