Client often got a lot of enquiries about what to do if they don’t pay employee’s super guarantee on time. So, if an employer failed to pay super on time, they must pay superannuation guarantee charge (SGC) and lodge SGC statement to ATO. The charge is made up of SG shortfall, 10% interest and an administration fee of $20 per employee, per quarter. If an employer pay SG late to employee's super fund, they may be able to use the late payment either to offset the SGC or to carry forward as pre-payment of a future contribution for the same employee.
Late payment offset
Employer generally be able to offset late payment amounts against the SGC if they:
• made the payment to employee's super fund
• made the payment before the date of SGC assessment was made.
• lodge your late payment offset election with ATO within four years of their original SGC assessment date.
To claim for late payment offset, employer can submit a completed spreadsheet version of the SGC statement which can be download from ATO portal.
Carry forward your late payment
This option is to use your late payment towards your super guarantee contribution. This is in the quarter it was actually paid or a future quarter. Employer can do this if it's for the same employee and the start of the quarter is within 12 months after the payment date.
Employer could not claim a late payment offset for contributions they have used as a prepayment for current or future periods. If they carry a late payment forward, it is tax-deductible in the year they paid it.
This article is for informational purposes only and does not form part of our advice. We could help you to lodge and pay super guarantee charge on your behalf. Please contact our team if you need any assistance.
Claire Chang