Paying Superannuation Guarantee (SG) on time is not just crucial for your employees, it’s essential for your business. If you make SG payments late, you need to go through a specific process to make a correction, which can affect both you, as the employer, and your employees. In this blog, we’ll discuss what happens if you don’t pay super on time.
What If You Don’t Pay Super On Time?
If you don’t make Super Guarantee (SG) payments on time or before the due date, then you need to:
- File a super guarantee charge (SGC) statement.
- Pay the super guarantee charge.
If an employee believes that their super guarantee contribution hasn’t been paid in the right way, they can get in touch with the ATO and lodge a referral. The ATO has access to Single Touch Payroll and superannuation fund data, which is usually combined with employee referrals to help address employers who fail to meet their super guarantee obligations. This information is used to identify non-compliance and implement preventative and corrective strategies when employers fail to meet their obligations. The ATO can take action to pursue outstanding debt and inform other employees about possible SG owed.
You may find it difficult to understand super guarantee contribution obligations, that’s why many employers reach out to the top accounting firms Melbourne. You must keep one thing in mind that your employee’s super contribution will be treated as paid on the date it is received by the super fund.
Late Super Guarantee Payments
Super Guarantee payments are considered late when SG payments are received after the quarterly super due date. If payments have been made late, your super obligations won’t be met for a quarter. To pay any super obligation you may have in the current quarter, late payments will be used automatically. If you want to use these payments to offset a super shortfall and nominal interest components of the SGC for an earlier quarter, you can make an election in your SGC statement in the late payment offset section.
It might be confusing for many of you to meet super guarantee obligations, so you can reach out to a professional to handle this matter. To manage your finances and accounts, you can seek help from tax accountants. If you want to find someone near your area, you can search online for ‘tax accountant near me’.
Late Super Guarantee Payment Options
If you fail to make a payment to an employee’s super fund on time, you may have to:
- Offset the shortfall and nominal interest components of the SGC.
- Put the payment towards future super payments. This is limited to a time period of no more than 12 months from the start of the quarter.
Super Guarantee Compliance Approach
The ATO may get in touch with an employer by email, phone, or letter if their data shows that employers have unpaid or paid their SG obligations late to remind them of the requirements to file an SGC statement. If you receive an email or a contact letter from the ATO and believe that you have paid in full and on time to the employee’s super fund, then you may have to:
- Check your records and address any data issues to ensure you have satisfied your obligations in full.
- Follow the instructions in the email or letter.
The ATO may conduct additional checks before taking any action for employers not meeting SG obligations. In some cases, the ATO will:
- Undertake an SG audit of an employer.
- Conduct SGC assessments with additional penalties for failing to lodge the statement by the due date.
You can also opt for small business bookkeeping in Melbourne to ensure accuracy in your records to avoid lodging wrong information to the ATO.
Conclusion
You need to meet superannuation guarantee (SG) obligations to avoid getting into trouble. Make sure you pay SG payments on time or before the due date. For more information on SG obligations, you can also get in touch with Reliable Melbourne Accountants.