25 September 2023

ATO Cracking down on late paid super - Understand your obligations and risks

How to avoid ATO scrutiny

  • Super must reach your employee’s super account by the due date
  • We suggest you pay staff super prior to the due date. This will allow for super processing time at all levels of the transaction including:
    1. The software / clearing house (eg. We have seen super clearing houses taking 7-10 business days to process)
    2. The staff members super fund to receive and allocate the contribution to their account.
  • Ensure you have confirmed processing times with your super fund / clearing house to ensure these are allowed for and employee's super does not arrive late
  • If you pay super late – even by 1 day – you must submit a SGC statement to the ATO

Why the ATO are cracking down?

  • Superannuation contributions are entitlements of employees.
  • Unfortunately, some employers have historically been slack or deliberately done the wrong thing and it is estimated there is approximately $29bn in unpaid super relating to the last 6 years.
  • The Government is working to ensure these obligations are met in order to provide a better retirement for more Australian workers.

How the ATO are cracking down?

  • The ATO now have access to a multitude of data that allows them to determine if super is paid late or not at all. (eg. Single Touch Payroll data and contribution data directly from super funds)
  • We have seen a steady increase in ATO correspondence which indicates the ATO are aware super was paid late and demanding the lodgement of Superannuation Guarantee Charge Statements. This is even for super paid as little as 1 day late.
  • If these Superannuation Guarantee Charge Statements are not lodged by the date requested in the ATO correspondence, you are likely to be the subject of an ATO audit.

What are the implications of late paid super

  • Late paid super means you MUST prepare, lodge and pay a Superannuation Guarantee Charge Statement within 28 days of the original super due date
  • Your Superannuation Guarantee Charge Statement will include:
    • an administration charge of $20 payable per employee
    • a nominal interest amount calculated based on the start of the quarter lodged late up to the date the SGC Statement is lodged
    • include superannuation on overtime which may not have previously been subject to super
  • The tax implications of this are:
    • The total amount of the late paid super is NOT tax deductible
    • The total amount payable for the SGC Statement is NOT tax deductible
  • Potential significant penalties:
    • If you are subject to an ATO audit – there could be additional penalties imposed at a rate of 200% of the SGC amount.
    • Furthermore, if you make a false or misleading statement, an additional penalty of at least 75% of the super shortfall could be charged.
    • If you are a director you could be liable for an additional penalty equal to the unpaid amount. The ATO could also issue a director penalty notice making you personally liable for the outstanding amount

Our office has seen first hand the ATO’s new approach to tackling superannuation compliance. However, the ATO approach is base on legislation and generally there is no room for leeway. We encourage you to be mindful of meeting your obligations and reach out should you need assistance.




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