Tag Archive for: Employment

What happens if you don’t meet your Super Guarantee obligations

As an employer, you are required by law to make superannuation guarantee (SG) contributions on behalf of your employees, at least quarterly. We know it’s easy to overlook obligations like these amidst the daily whirlwind of running a business, however, negligence with super guarantee payments can lead to severe consequences.

The implications of neglecting SG obligations

Failing to meet your SG obligations isn’t just a matter of procrastination – it’s breaking the law!

If you have not paid SG contributions to an employee’s super fund in full, on time and to the right fund, you need to lodge a statement to the ATO and pay a Super Guarantee Charge (SGC).

The SGC comprises three components:

1. The SG shortfall amount:

This occurs when employers fail to pay the full SG contribution or don’t adhere to their choice of fund obligations. Note: the SG shortfall is calculated based on employees’ full salary and wage amounts, not just their Ordinary Time Earnings (OTE).

2. Interest on the shortfall amount:

Currently a hefty 10%, nominal interest is calculated from the first day of the quarter that the SG was not paid until the ‘lodgment day’. Note: Once you become liable to pay the SGC, this accrues at least until the due date.

3. Administration Fee:

Currently $20 per employee, per quarter.

Additional penalties for neglecting SGC requirements

Employers who fail to lodge their SGC statement and pay the SGC by the due date face additional penalties on top of the SGC. These are quite aggressive and can escalate quickly. Two common and painful penalties are:

1. Failure to provide a SGC statement:

Late submission or failure to provide requested information during an audit can result in penalties of up to 200% of the SGC.

2. False or misleading statements:

Making false or misleading statements leading to underpayment of the SGC may trigger administrative penalties of up to 75% of the shortfall amount.

These penalties not only dent the bottom line but also tarnish the reputation of the business. They serve as a stark reminder of the importance of diligent adherence to SG obligations.

How to prepare and lodge your SGC statement

To report and rectify a missed SG payment, lodge a Super guarantee charge (SGC) statement and pay the SGC by the due date. Get the SGC statement and instructions for lodging it here:

Taking control of SG compliance

Leverage technology:

Employers must pay SG contributions to employees’ super funds according to the SuperStream standards, which requires that payments and data are sent electronically in a standard format. A Synectic adviser can assess the different methods available under SuperStream and set up the right electronic solution for your business. We can help you leverage technology solutions to streamline SG processes and minimise the risk of non-compliance.

Be proactive:

  • Keep abreast of SG regulations and deadlines to ensure timely compliance. Synectic post reminders and updates on our social media channels so keep an eye out.
  • Address any discrepancies or issues promptly, avoiding the accumulation of penalties and legal complications.

What next

While the demands of running a business may seem endless, overlooking SG obligations, including lodging your SGC statement, is a gamble not worth taking. Remember, compliance isn’t just a box to check—it’s a cornerstone of sustainable business practices.

Contact a Synectic adviser today to take control of your SG compliance.

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About the author

Sharni Jago Accountant Devonport Tasmania

Sharni Jago
Senior Accountant

Sharni is a Chartered Accountant with extensive tax and accounting and business advisory experience. She is passionate about building lasting relationships that allow her to get up close and truly help her clients. Sharni specialises in supporting small to medium business owners. Contact us today and ask to speak with Sharni.

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5 tips to avoid FBT on staff Christmas gifts and work party

Tax might not be high on the list of things you’re thinking about as Christmas approaches. But Christmas will be here in a moment, and many employers will be thinking about recognising their team’s efforts throughout the year. You may already have plans in place, but have you thought about how to manage tax and Christmas gift-giving? Especially FBT on your staff Christmas gifts and work party.

Feel free to celebrate, but make sure you don’t get stung with unexpected taxes. FBT and associated income tax and GST pitfalls are the big ones to watch out for.

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Employers need to get smarter with workforce strategies based on people data

With labour shortages here to stay, effective workforce strategies – based on sound people data – are crucial. Business owners are struggling to find workers, with 85% of Australian businesses reporting staff shortages are preventing operations at full capacity (Australian Financial Review, 3 Feb 2022). Forecasts predict unemployment rates will remain below 5% for the next five years (based on Statista May 2022 & IMF).

Combine this with the “great resignation”, or the “great re-evaluation”, or the “great reshuffle” – where employees are re-evaluating their employment status, career choice, or the industry or sector they work in – and the problem isn’t going to solve itself.

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JobKeeper extension

The JobKeeper scheme has been extended from 28 September 2020 until 28 March 2021. The extension applies over two separate extension periods:

  • Extension 1: from 28 September 2020 to 3 January 2021
  • Extension 2: from 4 January 2021 to 28 March 2021

For each extension period, an additional actual decline in turnover test applies and the rate of the JobKeeper payment is different.

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Important Updates to Job Keeper 1.0 & 2.0

Changes to JobKeeper eligibility rules, announced on 14th August, mean we now need to revisit JobKeeper 1.0 to ensure your business stays eligible and to maximise your JobKeeper entitlements. Indeed, the changes may result in increased JobKeeper 1.0 payments for some businesses.

The government has also announced a relaxation of eligibility criteria for JobKeeper 2.0.

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COVID-19 Important Updates

As we continue to adapt to life with the coronavirus, the one certainty is how rapidly things can change, and predicting how the next six months unfolds would be anyone’s guess. Despite the uncertainty, both Federal and State governments continue to do all they can to assist businesses and the economy to respond accordingly.

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Important JobKeeper Updates

The ATO continues to roll out much-needed details about JobKeeper Payments, allowing us to advise clients with increasing clarity. Recent information has served to broaden eligibility for some businesses and extend deadlines, opening pathways for more businesses to potentially benefit from the subsidy.

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JobKeeper – Important Updates

The roll-out of the JobKeeper program continues at a rapid pace. Is your business ready for the JobKeeper Subsidy?

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COVID-19 JobKeeper Payment update

The JobKeeper Payment, at $130B, is the single biggest economic support measure in Australia’s history. The more we hear and read, the more confident we are that this measure has definitely hit the mark and will be the saviour for many businesses and thousands of jobs.

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COVID-19 JobKeeper Payments

The third and largest COVID-19 (coronavirus) support package to date is a $130 billion economic injection designed to save jobs for the next 6 months. In this package, businesses may be entitled to receive a fortnightly wage subsidy of $1,500 per employee.

The so-called JobKeeper Payment is designed to keep people in work and the Government expects up to 6 million people will benefit from the subsidy.

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