What to do if you’re an employer and don’t pay an employee’s super guarantee (SG) in full, on time or to the right fund.

If you don’t pay super on time

If you don’t pay an employee’s super guarantee (SG) to the right super fund on or before the due date you must:

• lodge a super guarantee charge (SGC) statement
• pay the super guarantee charge.

If an employee believes their SG contribution hasn’t been paid correctly, they can contact us and lodge a referral. We have improved access to Single Touch Payroll and superannuation fund data, which is combined with employee referrals to help identify employers who may not have met their super guarantee obligations. We use this information to detect non-compliance and implement preventative and corrective strategies when employers do not meet their obligations.

We may also notify other employees about potential SG owed.

We can take firmer action to pursue outstanding debts, including the commencement of legal proceedings to recover an amount owed.

Your employee’s super contribution is only considered ‘paid’ on the date it’s received by the super fund. If you’re using a clearing house, payments made to the clearing house that aren’t processed, or don’t 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. This will ensure your payments will be processed before the payment due dates.

Late super guarantee payments

When SG payments are received after the quarterly super due date, they are considered late payments.

Your super guarantee obligations won’t be met for a quarter where late payments have been made. Late payments will be used automatically to pay any super obligation you may have in the current quarter. This may mean late payments are applied to a quarter that is different to when you intended.

If you would like to use these payments to offset a super shortfall and nominal interest components of the SGC for an earlier quarter, you can make an election in your SGC statement in the late payment offset (LPO) section.

Late super guarantee payment options

If you have made a late payment to an employee’s super fund you may be able to:

• offset the shortfall and nominal interest components of the SGC
• put the payment towards future super payments. This is limited to a period no more than 12 months from the beginning of the quarter.

Offset the SGC with late super guarantee payments

You can offset late payments against the SGC if you have:

• made the payment to your employee’s super fund
• made the payment before the date your original SGC assessment was made
• lodged your late payment offset election in the SGC statement through Online services for business within 4 years of your original SGC assessment date.

The offset late super guarantee payments against the SGC:

• aren’t tax-deductible
• can’t be used as a contribution for the current quarter or future quarter’s super contributions.

For quarters beginning on or after 1 January 2020, a salary-sacrificed contribution can’t be offset against the SGC.

Note: A nomination to offset late payments is binding and cannot be changed. If you choose to have the contributions offset against the SGC, you can’t withdraw this choice.

How to lodge a late payment offset election

To lodge a late payment offset (LPO) election, use the SGC statement (NAT 9599). Lodge through online services for business as follows:

• attach the SGC statement Excel spreadsheet to a new secure mail message
• select Superannuation as the topic
• select Lodge SGC statement as the subject.

If you’re unable to lodge online, phone us on 13 10 20 for other options.

Carry forward late super guarantee payments

You can carry forward a late SG payment if:

• it’s for the same employee
• the start of the carried forward quarter is within 12 months after the payment date.

If you carry forward a late super payment, it is only tax-deductible in the year it’s received by the super fund.

Super guarantee compliance approach

Our SG compliance approach supports employers that engage with us and want to get things right.

We may contact an employer by phone, email or letter if our data indicates they have underpaid or paid their SG obligations late to remind them of the requirement to lodge an SGC statement.

If you receive a contact letter or email from us and believe you have paid in full and on time to the employee’s super fund, you need to:

• review your records and address any data issues to ensure you have met your obligations in full
• follow the instructions in the letter or email.

We conduct additional checks before taking firmer action for employers unwilling to meet SG obligations. In some cases, we will:

• undertake an SG audit of an employer
• raise SGC assessments with additional penalties for not lodging the statement by the due date.

If you’re unsure what action to take for your situation, you can phone us on 13 10 20.

Difficulty paying super guarantee

If you’re having trouble meeting your SG obligations, you should make a voluntary disclosure. Complete and lodge an SGC statement (NAT 9599) by its due date, even if you can’t pay it in full. We will work with you to establish a payment plan.

Once you become liable to pay the SGC, nominal interest accrues to the later of the due date or date you lodge the SGC statement. We encourage you to lodge no later than the due date, to minimise nominal interest.

If you are experiencing difficulties lodging, phone us on 13 10 20 to discuss your circumstances.

Penalties

If you don’t lodge the SGC statement by the due date, a Part 7 penalty will apply.

We are more likely to reduce or waive the penalty if you:

• make a genuine attempt to meet SG obligations
• have a good compliance history.

For example, we may reduce a penalty for an employer who lodged an SGC statement after the relevant due date, but before being notified of ATO compliance action.

If you don’t lodge an SGC statement before audit action has started, a greater Part 7 penalty can apply. This could be up to 200% of the SGC.

How we can help

We can also help you:

• complete an SGC statement
• work out a payment plan when you are unable to pay on time
• understand your super guarantee obligations through our voluntary online Super guarantee employer obligations – online course.

If you’re unable to make a quarterly super contribution because you are affected by a disaster, we can help.

Unwilling to meet obligations

We will take stronger compliance action – including imposing additional penalties – if you don’t:

• engage with us promptly by replying to our correspondence
• take steps to resolve your outstanding super guarantee obligations.

We may also issue:

• a garnishee notice
• a director penalty notice
• a direction to pay SGC
• an education direction to complete the Super guarantee employer obligations – online course.

We take this approach with employers who:

• repeatedly don’t pay the correct amount of super guarantee
• make it difficult for us to determine an SGC liability
• repeatedly fail to keep appointments
• repeatedly fail to supply information without an acceptable reason
• deliberately supply information that is irrelevant, inadequate or misleading
• engage in any behavior to delay the supply of information.

If you have any questions, feel free to ask them in the comment section. We will be happy to answer all your queries.