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Sladen snippet – late contributions cannot be offset – employer must make contributions twice

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Where super guarantee contributions are not made by 28 days after the relevant quarter, a superannuation guarantee charge (SGC) liability is triggered. If the contributions are made after the due date, then, in certain circumstances, those late contributions can be offset against the SGC liability. However, as the recent case of Jordyn Properties Pty Ltd v FC of T shows, if those requirements are not satisfied, the offset will not be effective and the SGC liability will continue to be payable in full.  

An employer will generally be able to offset the late payment amounts against the SGC if they:

  • Made the payment to their employee’s super fund;

  • Made the payment before the date the SGC assessment was made (this means the original assessment, not any subsequent amended assessments); and

  • Lodge the late payment offset election with the ATO within four years of the original SGC assessment date.

In Jordyn Properties, the AAT affirmed that the SGC could not be offset for certain late contributions that were made after the SGC assessment was issued. On 10 November 2017, the employer was issued with notices of assessment for SGC payable for quarters between 1 April 2016 and 31 December 2016. The Commissioner amended the assessments upon the taxpayer electing to offset late contributions made before 10 November 2017 against the charges but declined to offset other late contributions made after that date.

This is an important reminder for employers to ensure they make late super guarantee payments correctly. For many employers who miss the super guarantee deadline, their initial instinct is to make those late payments as contributions to the relevant super funds. However, as this case demonstrates, that may not solve the problem and in fact result in them having to effectively make the contribution twice. In most cases it is preferable to pay the SGC (to the ATO) rather rely on the late payment offset. Any employers considering the late payment offset should carefully determine whether they qualify for the offset or whether it is better just to pay the SGC.

To discuss further or for more information please contact:

Phil Broderick
Principal
T +61 3 9611 0163  l M +61 419 512 801   
E  pbroderick@sladen.com.au 

Philippa Briglia
Senior Associate
T +61 3 9611 0173
E pbriglia@sladen.com.au

Lucy Liang
Graduate Lawyer
E lliang@sladen.com.au

Phil Broderick