Superannuation is an important benefit for all employees. Paying it on time is an essential back-office function for any small business — not only because it is the right thing to do for employees, but also because failing to do so is an extremely costly mistake.
If your back office has missed the official superannuation payment deadlines, it will encounter extra paperwork and fines. So here's a look at what to expect, along with a few tips on getting things right next quarter.
Getting serious about deadlines
Payments are meant to be received by your employee's superannuation fund by the 28th day after the end of the quarter. These dates are:
- 28 October
- 28 January
- 28 April
- 28 July
If your company pays its employees' superannuation even one day after these set dates, the payments will be considered late. This means you will incur penalties and must officially follow up.
Legal requirements for late payments
Lodging late payments puts you at risk of legal trouble and may trigger worries about wage theft. This is not territory into which you want to wander. So if you do miss a super guarantee payment, be sure to meet the requirement to lodge a Superannuation Guarantee Charge (SGC) statement within 28 days of the missed payment. You'll also need to pay an SGC shortfall payment. This isn't a set fine but rather an amount calculated by a formula. There is an online calculator to assist you. Essentially, the fine is comprised of:
- Superannuation based on salary and wages
- Any choice liability based on the shortfall up to $500
- Nominal interest of 10% per annum starting from the missed quarter
- Administration fees of $20 per employee, per quarter of missed super payments
Helpfully, it's possible to calculate this amount, complete the required paperwork and make payments online.
If you and your team do commit this rather costly error, it's essential to look at back-office functions that led to the error. Did it happen because of a systematic problem, like difficulties using payroll systems? Is there a challenge with keeping attendance? Do you have a dedicated employee handling payroll?
Considering the reasons for the error and working to craft better strategies is important for doing better next time around.
If you need help setting your super straight, WMC Accounting can help you craft a winning strategy for getting the pieces back in place again. Contact us today to learn about a variety of services that can help your business successfully meet its requirements and better benefit all employees.