Paying Your Employees Superannuation On Time

Posted: 28 February 2024

It is now critically important to ensure timely payment of your employees superannuation or Super Guarantee (SG) liabilities, due to the implementation of Single Touch Payroll (STP) and the ability for real time data matching.

The SG is a contribution that employers in Australia must make to their employees’ super funds. It’s a legal requirement under the Superannuation Guarantee (Administration) Act 1992 and currently is the amount of 11% of ordinary time earnings.

The introduction of Single Touch Payroll has allowed the ATO to significantly enhance its ability to monitor and enforce compliance with SG obligations. STP requires employers to report salary and wage payments, PAYG withholding, and superannuation information directly to the ATO each time you pay your employees. This real time reporting enables the ATO to match the data provided by employers with the contributions received by super funds, allowing them to quickly identify any discrepancies.

Failure to comply with SG obligations can result in penalties, including interest charges, administration fees and potential legal consequences. We have recently received letters from the ATO identifying clients who have not paid SG on time.

To ensure compliance and avoid penalties, we recommend the following:-

  1. Timely and accurate reporting: Ensure that your payroll processes are accurate and up to date, with systems in place to calculate and track superannuation contributions for all employees.
  2. Stay informed: Keep yourself updated on any changes to superannuation legislation and ATO requirements that may affect your SG obligations.
  3. Maintain comprehensive records: Keep detailed records of superannuation contributions, employee information, and payroll transactions to facilitate accurate reporting and compliance.

Timely payment of the Super Guarantee is crucial for meeting your superannuation obligations and avoiding penalties from the ATO. By ensuring that your superannuation contributions are paid correctly and on time, you can protect your business from financial risks and maintain compliance with regulatory requirements.

If you have any questions or concerns about your SG obligations or compliance status, please don’t hesitate to contact our office.