Unpaid super a focus for ATO debt collection
The ATO has revealed its focus areas for the current financial year, with business debt collection identified as a key strategic priority.
In its Corporate Plan 2024–25, the ATO says that it will have “an increased focus on business debt including superannuation guarantee, pay as you go withholding and goods and services tax”.
This is a timely reminder for all businesses to ensure they’re meeting their obligations in relation to super contributions for employees and eligible contractors.
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Superannuation Guarantee
Superannuation guarantee (SG) remains an important compliance focus area for the ATO.
The most recent ATO statistics show that although 94% of employers are meeting their SG obligations without ATO intervention, the ATO still raised over $1 billion in SG charge liabilities in the 2022–23 financial year.
That figure reflects a lot of extra super liability for Australian businesses that could have been avoided if they had paid the required SG contributions on time.
To ensure your business doesn’t incur these extra liabilities, you must pay SG contributions for your employees and eligible contractors on time and to the correct fund.
The quarterly due dates are as follows:
- Q1 (1 July – 30 September): 28 October;
- Q2 (1 October – 31 December): 28 January;
- Q3 (1 January – 31 March): 28 April; and
- Q4 (1 April – 30 June): 28 July.
Some important things to remember about super guarantee
From 1 July 2024, the minimum SG rate you must pay for each eligible employee has increased from 11% to 11.5% of their ordinary time earnings (OTE).
Some contracts and awards may require you to pay contributions more regularly than quarterly.
If you make contributions to a commercial “clearing house”, the contribution is considered to be paid when it’s received by the employee’s fund, not by the clearing house.
However, if you use the ATO’s Small Business Superannuation Clearing House, the contribution is “paid” when received by that clearing house.
From 1 July 2026, employers will need to pay SG at the same time as salary and wages (commonly known as “payday super”).
What if my business misses an SG payment?
Taking action promptly is essential to accessing the ATO’s support services and minimising your exposure to penalties.
The ATO says that it’s willing to work with employers who want to put things right.
When you miss a super payment, you must lodge an SG charge statement with the ATO within one month of the missed quarterly due date.
Lodging on time is important, as failing to do so will incur a further penalty known as a “part 7 penalty”, which can be up to 200% of your SG charge liabilities.
Also, when you lodge on time, you may then be able to set up a payment plan to pay your liabilities in instalments.
You can ask the ATO for an extension to the lodgment date, but you must do this before the due date.
You’ll also need to pay the SG charge.
This charge is more than the amount of contributions you would have paid if you had paid them on time, and it’s not tax deductible. The charge comprises:
- the amount of the missed contributions (but calculated on salary and wages, including overtime, which is more than the usual “ordinary time earnings” basis for on-time SG contributions);
- interest of 10% pa (which accrues from the start of the relevant quarter); and
- an administration fee of $20 per employee, per quarter.
This SG charge is paid to the ATO, not your employee’s fund.
General interest charge will accrue on any outstanding SG charge, and the ATO may also issue a director penalty notice if it remains unpaid.
Mistakes happen, but getting on top of problems early will lead to a better outcome for your business.
Contact our office for expert assistance in addressing your business SG obligations.
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.