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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

What to consider when consolidating your super

August 27, 2020

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds’ policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready: