Superannuation in Australia

In recent times, we have noticed the Australian Taxation Office (ATO) has begun rigorously following up late or non-payments of superannuation.  This has resulted in notices being generated for employers and fines being applied.

This fact Sheet is to provide some insight into what you can do to ensure you are up to date and compliant with superannuation requirements.

Superannuation is the payment made on behalf of your employees towards their retirement. Super Guarantee (SG) is the ATO defined minimum payment. In the 2023 financial year, this is 10.5% of the employee’s ordinary time earnings (aka wages for superannuation).

There are certain wages excluded for superannuation calculations such as leave paid out at termination or overtime.

Superannuation must be paid quarterly by the 28th of the month following the end of each quarter.  That is the 28th January, 28th April, 28th July and 28th October each year.

Aa mentioned, the ATO is following up late and non-payment of superannuation. This has become much easier for them in recent times with their data matching processes advancing quickly with the lodgement of all wages through Single Touch Payroll.

If an employer is found out to have become behind on payments, the potential consequences of late payment of superannuation are significant and include:

• Loss of the tax deduction by the employer for superannuation paid

• Interest charged on the late payment (portioned for days late)

• $25 per employee per quarter fine

In addition to the above fees, there is a substantial amount of paperwork that needs to be filled in for each amount of superannuation that is late which may need your organisation to spend considerable time OR have to pay costs for your accountant to fill this in on your behalf.

If a company has $10,000 in late superannuation across 10 employees, this would result in $250 fines to the ATO that are Non Deductible plus interest on the superannuation.

In addition to this, the $10,000 superannuation, once paid, would also be non-deductible and in a company would cost $2,500 in tax refund that they would no longer get.

1. Use a payroll software to prepare wages each pay period

2. Ensure all wages paid through payroll match back to amounts paid through the bank

3. Use the reports from the payroll software to prepare your superannuation for the quarter

4. Ensure all super is lodged through a clearing house and paid prior to 28th of the month after the end of the quarter

5. Contact us to do a review on your payroll to see if you need to change any processes

The ATO now provides a clearing house for superannuation payments.

This clearing house allows payments to any superannuation funds and provides a single lodgement area for all the payments.

This means you can lodge the superannuation payment and make one payment, rather than going to each individually super fund directly.

Payments through the ATO Clearing House must be made within 48 hours of lodging the superannuation details and must be paid in a full amount (e.g. not partial payments) as they will not match otherwise.

If you have outstanding superannuation payments for your employees, or are concerned about falling behind, contact us today at 07 3422 1333 to discuss how we can help.

For more information about superannuation for employers, please see the ATO links below.

https://www.ato.gov.au/Business/Super-for-employers/

https://www.ato.gov.au/Business/Super-for-employers/Missed-and-late-super-guarantee-payments/

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