Single Touch Payroll (STP) and Superannuation Guarantee Charge (SCG) Late Payments

Posted: 15 January 2020

It is now compulsory for all employees to be registered for STP, which for every pay run automatically forwards information to the taxation department.
The information provided also includes any SGC liability for your employees and when these are paid.
SGC payments are due within 28 days for the end of the quarter.

Quarterly payment due dates for super payments

When a due date falls on a weekend or public holiday, you can make the payment on the next working day.

If you fail to pay the full amount of super within this time, or pay late, a shortfall arises the consequences are:

Superannuation Liability

If you haven’t paid the instalment the outstanding amount needs to be remitted to the tax department by completing the prescribed form.   If you have paid the super late you can apply the amount as an offset against the outstanding amount but still must complete the same form.

Nominal Interest

Interest is charged at 10% on the outstanding balance from the time the SGC was due to be paid.

Administration Fee

The tax department charges a $20 fee per employee, per quarter.

The entire SGC amount (Super, Interest, and Admin fee) is not tax deductible. 

What you can do to avoid this problem:

  1. We are recommending that superannuation liability be paid monthly.  At least if something does go wrong the outstanding amount is likely to be 1/3 of the value.
  2. Put funds aside each week if possible into a separate bank account, same as we recommend for the GST.
  3. As most superannuation payments go through a clearing house ensure you pay early  enough for the funds to reach the employees super account. We recommend payment at least 7 days prior.
  4. Ensure that your business has an employer nominated fund (default fund) for new employees that are slow to provide superannuation details. The ATO does not accept a lack of information as a reason to pay late or not pay.
  5. If you are aware that you will not be able to make the SGC payment on time or have paid late contact us to discuss options.  From experience the tax department will negotiate a repayment arrangement, particularly if you are proactive in contacting them.

If you any questions regarding SGC please do not hesitate to contact the team.