Earlier this year, the 2023/24 Federal Budget allocated more than $40 million to the Australian Taxation Office (ATO) to be utilised in targeting Superannuation Guarantee compliance, and it hasn’t taken long to see the increased activity in this area.
The current ATO super guarantee compliance focus is zeroing in on the details to ensure a stricter level of compliance across business and employer obligations.
Now, ATO activities look at not only were all the super contribution payments made, but were they on time? If they were late, how late? They are getting much quicker, and more efficient, at identifying those who are not meeting their obligations and getting in touch to let them know.
So for those who might be a little behind on their super guarantee contributions, or perhaps not giving it the priority it deserves, because you think you can go unnoticed or won’t get caught out, take note.
How are the ATO targeting employers who make late super payments?
One of the core focuses for the funds from the budget, and subsequent compliance activities, was in regards to improving data matching systems and programs.
Following the rollout of Single Touch Payroll (STP) Phase 2 and further expansion of the ATO’s data-matching programs, they now have access to more detailed amounts of data when it comes to employer’s super guarantee contributions. While they previously had access to some of this data, they are now working to expand how it is used.
Better Data = Increased & Quicker Follow-Up of Non-Compliance
The increasing instances of ATO conducting super guarantee contribution audits, in combination with the higher level of detail available, allows the ATO to be more proactive in its follow-up of non-compliance. It is expected that reminders for payment and lodging super guarantee charge statements will occur within much shorter periods that employers might have experienced in the past.
More ATO Scrutiny isn’t Always a Negative
While increased pressure from the ATO to make required payments is not necessarily considered a positive interaction, there are in fact many benefits to this approach, for both employers and employees.
For employers, more timely and frequent reminders may result in staying on track with payment and reporting obligations and therefore less accumulated penalties. For employees, the ATO efforts will help to ensure that they receive the compulsory super contributions that they are entitled to, as and when they are due.
Quick Guide to Super Guarantee Contribution Obligations
Compulsory Superannuation Guarantee Contribution
As an employer, it is compulsory to pay your eligible employees super guarantee (SG) at least 4 times a year.
The minimum SG rate you must pay for each eligible employee is 11% of their ordinary time earnings (OTE). This is scheduled to progressively increase to 12% on 1 July 2025.
Your employee’s super contribution is only considered ‘paid’ on the date it’s received by the super fund. If you are using a clearing house, payments made to the clearing house that are not processed, or do not reach the super fund until after the payment due date, are considered late payments.
Processing times vary between clearing houses. You must check the processing timeframes required by your clearing house to ensure your payments will be processed before the payment due dates.
Super Guarantee Charge
If you don’t pay an employee’s super guarantee amount in full, on time and to the right fund, you must pay the super guarantee charge (SGC). You must also lodge an SGC statement to the ATO.
The SGC is more than the super you would have otherwise paid to the employee’s fund and is not tax deductible.
The due date for payment of the SGC and lodging the statement is one calendar month after the SG due date.
| Quarter | SG payment due date | SGC and statement due date |
| 1 July – 30 September | 28-Oct | 28-Nov |
| 1 October – 31 December | 28-Jan | 28-Feb |
| 1 January – 31 March | 28-Apr | 28-May |
| 1 April – 30 June | 28-Jul | 28-Aug |
The SGC includes:
- the SG shortfall, made up of:
- SG calculated on salary and wages (including any overtime)
- any choice liability, based on the shortfall and capped at $500
- nominal interest of 10% per annum (accrues from the start of the relevant quarter)
- an administration fee of $20 per employee, per quarter.
So, depending on the amount of your salary and wages each quarter, as well as how many employees you have, the SGC can easily accrue to a substantial amount, especially if you are regularly not meeting your payment obligations.
Avoiding Problems with the ATO is Simple: Do the Right Thing.
We recently reported similar increased activity from the ATO in regards to targeting the cash economy and underreporting taxable income. The leniency and amnesties we saw implemented in the past due to the economic effects of the covid-19 pandemic are no longer available as the ATO works to elevate compliance and collection across key areas such as income tax and superannuation guarantee contributions.
The key message is the same here. Do the right thing. Make your compulsory super guarantee contributions accurately and on time and you will have no problems. Don’t do the right thing, and you can expect to be hearing from the ATO pretty swiftly with their new compliance processes and procedures in place.
Of course, the ATO understands that sometimes businesses find themselves unable to meet their obligations. This is where it is even more important to take a proactive approach and seek assistance as soon as possible, rather than “sticking your head in the sand”.
Expert Superannuation & Tax Advice for Your Business
If you find that you are unable to meet your super or tax obligations and need help liaising with the ATO, or need advice about how best to manage your super guarantee payment obligations, the experienced team of tax accountants at The Quin Group are on hand to help you navigate the best course of action for your individual situation.
Contact us by completing an online enquiry form or call 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange a meeting or teleconference.
