Employer penalties for unpaid super contributions

Written on the 30 May 2014 by Macmillans Waller Fry - Accountants in Maitland

Employers who are not meeting their super obligations may lose the tax deduction they would normally receive for super contributions

They will also have to pay a superannuation guarantee charge to the ATO.

From 1 July 2013 employers must be paying 9.25 percent of each eligible employee’s ordinary time earnings each quarter in super. From 1 July 2014 this will increase to 9.5 per cent.

The date for the next quarterly cut-off for superannuation contributions is the 28 July, which applies to the period of 1 April to 30 June.

If employers have not met their super obligations they will need to lodge a Superannuation guarantee charge statement with the ATO and also pay a superannuation guarantee charge.

Also, their business may lose the tax deduction that they would normally receive for superannuation contributions. This is because like most late payments the super guarantee charge is not tax deductible.

Employers will have to pay the super guarantee charge if:

• they do not pay enough super contributions to their employee. This is known as a super guarantee shortfall.
• they do not pay super contributions by the quarterly cut-off date for payment.
• they do not pay super to their employee’s chosen super fund; this is called a choice liability.

The super guarantee charge is made up of the super guarantee shortfall amounts, nominal interest at 10 per cent per annum, and an administration fee of $20 per employee, per quarter.