Employers have a legal responsibility to pay eligible employees superannuation to provide for their retirement. And although most employers do the right thing, some do try to bend the rules which can see them facing hefty penalties.
Employees are entitled to superannuation if they are paid $450 or more before tax in a calendar month, this is known as the super guarantee (SG).
To remain compliant, employers must pay SG quarterly using SuperStream. Not paying on time or not paying the right amount may mean you need to pay the super guarantee charge (SGC) and you cannot claim a tax deduction for super payments.
Additionally, employers must report and rectify missed, late or underpaid SG contributions by lodging an SGC statement by the due date.
The ATO reminds employers who are able but unwilling to meet their obligations that they are breaking the law. Firm compliance action is taken for employers who:
- Repeatedly fail to pay the correct amount of SG
- Attempt to obstruct the ATO’s ability to determine an SGC liability
- Repeatedly fail to keep appointments
- Repeatedly fail to supply information that is irrelevant, inadequate or misleading
- Engage in any culpable behaviour to delay the provision of information.
The compliance history of an employer will determine the action of the ATO and the penalties to be applied.