Are you up-to-date with the Super payments? As an employer, you need to be sure your are paying the superannuation to your employees at the right time.

Many consequences may arise by not making super contributions at time. One of those is the “Super Guarantee Charge (SGC)” you must pay to the ATO.  

As you know, when you run a business you must make super guarantee payments to your employees funds by the quarterly due day, which are 28 days after the end of each quarterly.

If you pay the superannuation of your employees after the due date, a super Guarantee Charge (SGC) may apply, and you will need to lodge a SGC statement to the ATO the following month.

What is the Super Guarantee Charge made up of?

This charge is composed by:

  • Super guarantee shortfall
  • Interest on the shortfall (currently 10% pa)
  • An administrations fee of $20 per employee per quarter.

It is important for you to know that the SGC is not deductible.

What happens with the SCG you have paid?

Even if you make the Super payment at a later day, SGC will still apply. However, you can use the late payment to either offset the SGC or carry it forward as a prepayment of a future contribution of the same employee.

Let’s explain those alternatives with examples:

Option a) Late payment offset

Alessa must pay super contributions for her employee, Jhon. She needs to make a contribution to Jhon’s super fund by 28 October for the quarter ending 30 September.

However, Alessa made the payment to the fund on 3 January, but before the date the original superannuation guarantee charge (SGC) assessment was made.

As Alessa missed the due date, she lodges an SGC statement and pays to the ATO the SGC.

In the statement, Alessa chooses to have her late payment applied as an offset to reduce the SGC. She lodges her SGC statement on 10 January, claims the late payment offset and pays the difference.  

Option b) Late payment carried forward

Jerry needs to pay super contributions for his employee, Carol. For the quarter ending the 31 March. Jerry, have to make a contribution to Carol’s super fund by 28 April.

However, Jerry makes the payment on 5 May. This is after the quarterly due date of 28 April, and before the date the original superannuation guarantee charge (SGC) assessment was made.

As Jerry missed the due date, he must lodge an SGC statement and pay us the SGC.

In the statement, Jerry chooses not to offset the late payment against the SGC he must pay. He lodges the statement on 12 May and pays the SGC.

Jerry decides to carry forward his late payment from 5 May and use it towards his obligations for Carol for the quarter ending 30 June. Jerry can do this because the payment is for the same employee and for a quarter in the 12 months following the date he paid (both are requirements to choose the “carry forward” option).  

More information

To avoid any trouble with the ATO and not miss any Super Contribution, contact us, we are here to help you. Our special team will give you the best advice to keep on track your Super Contributions. Otherwise, in case you have missed a Super payment, we can help you to lodge correctly the SGC statement. Please contact us at [email protected], or call us to (+ 61) 2 8317 1281.