The Australian Taxation Office (ATO) has recently been placing a significant amount of effort into reviewing the timing of Superannuation Guarantee (SG) payments.
Currently, SG regulations stipulate employers must pay 9.25% into an employee’s superannuation fund by the 28th day of each quarter, unless that day falls on a weekend, in which case it is moved to the Monday following.
“This payment must be received by the superannuation fund by this date. Posting a cheque on the 28th will not meet these requirement,” Katie Timms, principal at RSM Bird Cameron, said.
Timms added that companies late in paying are liable for a Superannuation Guarantee Charge (SGC). This is based on salary and wages, not Ordinary Times Earnings (OTE). “For companies where there is a significant amount of overtime, the SGC can be substantial.”
Key HR takeaways
To avoid fines, headaches and simply ensure smooth operations, RSM Bird Cameron has compiled a number of tips for employers to make sure they are in compliance with SG payments:
Ensure that SG is being paid on the correct OTE.
Consider making payments through Electronic Funds Transfer (EFT), so that it will be automatically generated prior to the deadline.
If you have recently acquired shares in a company, review records to ensure the compliance of that company and its subsidiaries. If you are currently acquiring shares, ensure procedures are in place to check on SG payments, or that warranties are included in the Share Purchase Agreement.
Review recent SG payments to confirm that the amounts are shown on bank statements at appropriate times.
And the obvious? Pay on time!