If you’re an employer, 2020 is the year you need to make sure you’re paying superannuation entitlements on time, and that doesn’t necessarily mean paying on the ATO’s nominal due date.
With the advent of SuperStream and Single Touch Payroll (STP), the Australian Tax Office (ATO) has gained an unprecedented level of transparency into super payments.
And from the start of this year, those employers who don’t stay on top of paying their workers’ super may find themselves owing more money to the ATO as a result.
According to the Tax Practitioner Stewardship Group key messages for 15 November 2019 on the ATO website:
The ATO is using Single Touch Payroll and Member Account Transaction Service (MATS) data to identify employers that are consistently late in paying their employees superannuation guarantee and have commenced a campaign to advise those employers that they need to lodge a superannuation guarantee charge statement.
Read more about the Superannuation Guarantee (Administration) Act 1992 here.
Debra Anderson of Anderson Tax & Consulting, told The Pulse that the risk of having to pay a Superannuation Guarantee administration fee and additional interest was always going to be problematic for business owners following the release of Single Touch Payroll.
“First it was SuperStream, which meant the funds had to report all contributions they’ve received to the ATO.
“Now, with the introduction of Single Touch Payroll, businesses are reporting super owed with every pay run.”
And that means the ATO has gone from having to rely on employees realising they’re owed super and reporting it, to a scenario where it knows, almost in real time, exactly who owes what.
As a result, any missed or late super payments will incur a Superannuation Guarantee administration charge, as well as any interest accrued on the super from the first of that month.
But for business owners, there’s an added complication.
“Many business owners might believe they can pay out their employees’ super by the nominal due date, but that may make them unintentionally late to pay.”
For employers paying super direct via the ATO’s clearing house, there’s no delay to that payment being registered.
But that’s not the case if you use another clearing house, said Anderson.
“Most people don’t realise that super must be received by the fund by the due date, not simply paid on that date.
“That’s because the clearing houses can’t guarantee how long it will take for funds to clear – usually it’s between four and 10 days.”
Employers looking to avoid becoming unintentionally delinquent in their super payments will need to pay super by 18 January to meet their Q2 obligation.
Quarterly superannuation deadlines:
|Quarter||Period||Payment due date|
|1||1 July – 30 September||28 October|
|2||1 October – 31 December||28 January|
|3||1 January – 31 March||28 April|
|4||1 April – 30 June||28 July|
“There is no discretion or leeway under the law for the ATO,” an ATO spokesperson told The Pulse.
“Those employers who fail to pay the correct amount of SG [superannuation guarantee] or pay it late after the end of the quarterly payment date, are required to lodge a Superannuation Guarantee Charge statement and pay outstanding amounts including an added interest and a mandatory administration fee.”
For employers, that means the ATO is now obliged to begin proactively contacting employers who are late with super payments, providing notice of what they’re owing.
“The Tax Commissioner has no discretion in this,” Anderson reiterated.
“The Superannuation Guarantee Act doesn’t give the commissioner any discretion – it’s quite complex legislation and it’s also quite rigid.
“Remember, the system is now purely based on joining the dots between SuperStream data and STP data – once a computer flags you as late on a payment, you could be issued a notice.”
The ATO told us that, as of October last year, they had begun contacting employers who had appeared to be making late super payments, or missed them completely, over several quarters.
“It’s important to note that employers who do not lodge SGC statements as required may be subject to further contact, including potential audits and penalties and that the ATO is increasingly in a better position to take action sooner,” the spokesperson said.
For this reason, employers have even more reason to get on top of their super payments this year, which requires an STP-enabled payroll solution.
UPDATE: Since this article was written, an amendment has passed the Senate that creates provision for a one-off amnesty period for employers to disclose unpaid super to the ATO without risk of penalty.
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