Important Reminder for Australian Employers: Superannuation Contributions Due Today
Australian employers are reminded that today marks the deadline for lodgment of employee superannuation contributions for the quarter ending June 30. These are mandatory payments, known as the superannuation guarantee (SG), which must be made quarterly to all employees.
Changes to Contribution Rates
As of July 1, the SG rate has increased from 11.5% to 12%. For payments made before July 1, the previous rate of 11.5% applies. However, any wages paid to eligible employees on or after July 1 must have the new rate of 12% applied, even if some pay periods fall before this date. This increase is the final legislated rise after a series of increments that began in 2021.
Failure to make these payments by the deadline of July 28 could lead to serious penalties imposed by the Australian Taxation Office (ATO). Historically, while the ATO had been somewhat lenient with late payments, it is now enforcing the rules more strictly. It is important to note that contributions are only considered "paid" once they reach the employee’s super fund in full.
Penalties for Non-Compliance
Employers who miss the deadline or fail to submit a super guarantee charge (SGC) statement may face several penalties:
- Fines that can equate to up to 200% of the unpaid amount
- Imposition of a general interest charge (GIC) and additional administration fees
- Director penalty notices that allow the ATO to recover penalties through methods such as withholding tax refunds
Employers can reduce these penalties by paying the outstanding amounts or if the business enters voluntary administration or liquidation.
Future Changes to Superannuation Payments
Currently, superannuation payments are made quarterly, but from July 1 next year, this will shift to a "payday super" model. This means employers will have a maximum of seven days from the payment of wages to remit the relevant superannuation contributions to employees.
This change, first announced in 2023, aims to eliminate unpaid super contributions. The ATO estimates that in the financial year 2021-22, approximately $5.2 billion of superannuation contributions were inadequately transferred to workers.
As a result of these upcoming changes, many businesses are beginning to assess their cash flow needs. Recent findings indicate that 65% of small to medium enterprises believe the new payday super rules will significantly impact their operations. Additionally, they will require, on average, an extra $124,000 in working capital to adapt to the new requirements.
Employers are encouraged to prepare accordingly to avoid potential disruptions and penalties.
By understanding these obligations and adjusting their financial processes, Australian businesses can successfully navigate these changes while ensuring compliance with superannuation laws.
For the latest updates and more information, employers can contact the ATO or consult with financial advisors to stay ahead in managing their responsibilities regarding superannuation contributions.
