Failing to make super guarantee contributions on time is not a breach of the super laws, but it will trigger tax for the employer, and potentially penalties.

The current super guarantee percentage is 10% (moving to 10.5% from 1 July 2022). That is, all employers must, as a minimum, pay 10% of an eligible employee’s ordinary time earnings to the employee’s complying super fund, at least on a quarterly basis. The due date for each quarter is 28 days after the end of that quarter (eg, for the quarter ended 31 March 2022, contributions were due by 28 April 2022).

If you’ve failed to make contributions on time on behalf your employees, it’s important not to simply make the contributions to the super fund late (as that won’t solve the problem). Here’s what to do to keep tax (ie, the super guarantee charge) and associated penalties to a minimum:

Within 28 days of the second month after the end of the quarter (so, using the above dates, by 28 May 2022) - lodge a super guarantee charge statement with the ATO setting out the missed (or late) super contributions; and
Ideally, by the same date, pay the super guarantee charge to the ATO or if that is not possible enter into a payment program with the ATO.

It’s particularly important to lodge a super guarantee charge statement on time, as failure to do that can mean incurring additional penalties (up to 200% of the super guarantee charge).

The super guarantee charge is broadly made up of:

The super contributions that should have been made, but calculated on a higher earnings base (total salary and wages instead of ordinary time earnings);
Interest; and
Admin fee of $20 per employee per quarter.

The ATO has an online super guarantee charge calculator that employers can use to calculate their totals.

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

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

Jan Oh
Graduate Lawyer
T +61 3 9611 0158
E joh@sladen.com.au