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Penalty for unpaid super

Employers who are not meeting their super obligations may lose the tax deduction they would normally receive for super contributions. They will also have to pay a superannuation guarantee charge to the ATO.

From 1 July 2013 employers must be paying 9.25 percent of each eligible employee’s ordinary time earnings each quarter in super. From 1 July 2014 this will increase to 9.5 per cent.

The next quarterly cut-off for super contributions is the 28 April, which applies to the period of 1 January to 31 March.

If employers have not met their super obligations they will need to lodge a Superannuation guarantee charge statement with the ATO and also pay a superannuation guarantee charge.

Also, their business may lose the tax deduction that they would normally receive for superannuation contributions. This is because like most late payments the super guarantee charge is not tax deductible.

Employers will have to pay the super guarantee charge if:

-they do not pay enough super contributions to their employee. This is known as a super guarantee shortfall.

-they do not pay super contributions by the quarterly cut-off date for payment. The next payment cut-off date

-they do not pay super to their employee’s chosen super fund; this is called a choice liability.

The super guarantee charge is made up of the super guarantee shortfall amounts, nominal interest at 10 per cent per annum, and an administration fee of $20 per employee, per quarter

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News

Reviewing your super

July 19, 2018

The ATO is encouraging taxpayers to review their super this tax time.

Finding lost super or consolidating any unwanted multiple accounts can make a massive difference to your nest egg.

There is over $18 billion in lost and unclaimed super. Those who have changed their name, address, job or lived overseas are at high risk of having lost super.

During the last five years, more than $10.7 billion of super has been consolidated from over 2.1 million accounts through ATO online services.

The ATO is also reminding taxpayers that the new super deduction is available. Most people under 75 years of age can claim a tax deduction for personal after-tax super contributions.

Personal super contributions deductions provide a level of flexibility for young people that change jobs frequently, self-employed contractors, small business employees, freelancers and people whose employers do not offer salary sacrifice arrangements.

To claim a deduction for any personal super contributions made in 2017/18, you must lodge a notice of intent to claim a deduction with your fund and receive a confirmation letter from them before lodging your tax return.