by Luke Quinnell
Employers must now pay Superannuation contributions for employees on the same frequency as their wage payments.
You should be prepared for the increased frequency of superannuation payments. Each fund must receive the contribution within 7 days of each payday.
If you are not prepared for this change, please contact your accountant immediately for assistance in getting on top of your employment obligations.
What happens if you don’t pay your employees’ super on time?
You must fix it as soon as possible by paying the outstanding amounts of superannuation. If you cannot pay in full, you should pay as much as possible.
The ATO will then calculate the super that is unpaid, paid late or underpaid. Based on this the ATO will determine a super guarantee charge you are liable to pay and issue you with a notice of assessment for payment.
This will happen automatically and is based on the payroll information you lodge each payday through your payroll software (i.e. Single Touch Payroll).
This charge will be made up of 3 main elements:
- The shortfall of the super guarantee payment. (i.e. the underpaid super itself)
- Notional earnings (i.e. notional earnings that would have occurred on those contributions had they been paid on time)
- An administrative uplift amount (i.e. essentially a penalty for not satisfying the payday super requirements and covering the cost of enforcement) – this starts at 60% of the above two elements and can be reduced by voluntary disclosure or good historical compliance with payday super.
Ensure your business is ready for payday super
Payday super is now live; you should be ready and prepared to pay your employees’ contributions on the same frequency as their pay runs.
If you are not prepared yet, you should act now to ensure you are ready before the ATO starts calculating and issuing assessments for underpaid or late super payments.
Please get in touch with us below or call us on 02 4969 6600 if you need any advice or assistance.
