The ATO will be enforcing stricter penalties regarding superannuation compliance for employers who fail to meet their superannuation guarantee (SG) obligations.
Penalties have been introduced to hold employers who are unable or unwilling to meet their SG obligations accountable. This includes non-payment, under- payment, or late payment of super contributions to an eligible employee’s complying super fund. The ATO provides tools that enable employers to understand and meet their SG obligations.
Importance of Superannuation Compliance
Paying super contributions:
Employers are required to pay 9.5% of an employee’s ordinary time earnings to superannuation. These contributions must be paid to a complying fund by the quarterly due dates, which are 28 days after the end of each quarter.
Penalties for non-compliance:
Employers who do not meet their SG obligations may be liable for a range of penalties or charges. If the correct amount of contributions to a worker’s super fund has not been made by the due date, employers will be required by law to lodge a superannuation guarantee charge (SGC) statement.
In addition to the SGC, other penalties that may be imposed include:
- A Part 7 penalty which is applied if an employer lodges their SGC late or fails to provide a statement or information when requested.
- A general interest charge (GIC) that is applied when an SGC is not paid by the due date. The GIC is calculated on a daily compounding basis and is tax- deductible in the year it is incurred.
- An administrative penalty if an employer makes false or misleading statements in order to pay less SGC than they should.
- A choice liability imposed when an employer does not give an eligible employee a choice of super fund.
In some cases, legal action may be taken by the ATO to recover outstanding tax and superannuation debts. SG audits may also be undertaken in the ATO’s tough approach on superannuation compliance. For more information and to ensure that you are meeting all SG obligations as an employer, you should consult with a tax financial adviser.
Important tax dates regarding Superannuation Compliance
Lodge 2018 tax returns for all entities that did not have to lodge earlier and are not eligible for the 5 June 2019 concession.
Lodge and pay April 2019 monthly business activity statement.
Lodge and pay eligible quarter 3, 2018-19 activity statements if you lodge electronically.
Pay Fringe benefits annual tax return if lodging electronically.
Is your business on top of your superannuation compliance commitments? Are you looking for advice and assistance regarding superannuation obligations? Get in touch with us at Taggart & Partners today to streamline your payroll tax obligations.
Updated 29th February 2020
*** This publication is for guidance only, and professional advice should be obtained before acting on any information contained herein. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. Publication date April 2019