Local financial guru urges businesses to stay updated on super obligations
INDUSTRY UPDATE
With over a decade of experience in the accounting industry, I can confidently say there has never been a more important time for businesses to be both aware and up-to-date with their superannuation obligations.
The ATO has become more proactive in auditing businesses that are not keeping up with their obligations, thanks to the almost real-time monitoring of superannuation payments made by these businesses.
You might have heard about Single Touch Payroll (STP), where employers submit pay slips to the ATO as soon as they pay their employees.
But what some may not know is that this reporting also gives the ATO live visibility of employers' superannuation obligations.
Conversely, super funds also tell the ATO exactly how much super payments they have received. This gives the ATO the full picture of the situation.
In the past, the ATO could only get all this information through a Superannuation Guarantee (SG) audit, usually triggered when a dissatisfied employee reported them.
Key questions
There are a number of questions we need to consistently answer for clients when it comes to their super obligations, such as:
What happens if I get a super audit from the ATO?
In the event of a super audit, you will be required to complete a Superannuation Guarantee Charge (SGC) Statement for each quarter being audited.
This statement will calculate a $20 admin fee per employee per quarter, the owed super amount, and the interest between the due date and the preparation date of the form.
Will I get penalised?
The ATO can impose penalties for unpaid super, which can vary from 10 percent to 200 percent of the outstanding balance.
The severity of the penalty depends on the amount owed and whether there's a history of non-payment.
Do I still get a tax deduction if I pay my super late?
Simply, no. You do not get a tax deduction if super is paid late which is a massive penalty in itself before the ATO levies the penalty above.
If super for the quarter was say $10,000 and you paid it 1 week late, it is not tax deductible. The additional tax now payable will likely range from $2,500 to $3,900 for most employers.
“I only pay subcontractors so I don’t have to pay super”…
In many cases, this is not accurate. Subcontractors working as sole traders and invoicing for labour could be considered employees for superannuation purposes.
Not paying super for subcontractors is a potential non-compliance issue with the ATO.
Though they may not catch it easily now, businesses should be cautious because consequences may arise later.
Unawareness of this risk poses a time bomb for businesses. If caught, they must repay all owed super, fees, interest, and penalties without tax deductions, even for engagements dating back over 15 years.
What should I do if I can’t pay my super on time?
We highly recommend lodging an SGC statement with the ATO on the due date as it allows you to benefit from an acknowledged super debt, the possibility of arranging a payment plan, a lower chance of ATO penalties, and a reduced likelihood of an audit.
How can I stay on top of my super obligations?
Most payroll/accounting software has a 'super clearing house' for quick super payments.
The process takes under a minute, with funds directly debited from the business account to super funds.
Paying super with each pay run is advised for easier management and to avoid accumulating a large liability over the quarter.
From 1 July 2026, the ATO will be introducing ‘Same Day Super’ which will make it compulsory for employers to pay superannuation on the same day as the wages.
If you would like to discuss your super obligations, Mitch Williams can be contacted at [email protected]
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