Super guarantee obligations

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.

Contact us

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.

Contact us