In this video I wanted to run through what happens if you pay your super late. This is for small business owners in Australia who might be struggling to pay their superannuation on time. Here’s a quick blog on the implications if you pay super late, even if it is by one day. 

As an Australian business owner, if you are unsure of your super obligations and need a little bit more information, the ATO website is the best place to go. Here’s what the page says:

FAQs on paying superannuation 

Common Question #1 – Super due dates: When is my super due?

It’s always 28 days after quarter end.

Common Question #2 – Super clearing house: What is a superannuation clearing house?

As a small business owner, you’ve got to pay your employees superannuation. You don’t just pay them, you’ve got to pay their super fund. But there’s a step in between where you have to pay a clearing house and that clearing house distributes the correct funds to employees’ respective superannuation funds. If you’re using Xero, it has its own built-in clearing house. You can nominate a separate clearing house and the ATO also has a free clearing house you can use.

Common Question #3 – Realities of paying late: What happens when I pay my super late?

1) Annoyed bookkeeper as they will need to process a Superannuation Guarantee Charge form (unnecessary additional work).

2) Annoyed accountant as they help you claim a tax deduction for super. IMPORTANT NOTE: Super paid late is not tax deductible. 

3) You’re annoyed because you pay more tax by not being eligible for the super deduction + more bookkeeping/accounting fees for preparation and lodgement of SGC form.

Common Question #4 – Payment steps: What are the steps when you pay your super late?

An SGC form will have to be prepared for lodgement. It’s made of your outstanding super payable. And the ATO charges a $20 admin fee per employee per quarter. So if you’re constantly late, or you have a lot of employees, that’s gonna hurt. And lastly, they are going to apply an interest charge currently about 10%. So the total payable that you need to pay won’t be just the outstanding super payable, but + admin fees + nominal interest charges.

The ATO wants you to be good business owners. They want you to pay your super on time so that money is utilised and invested in your employee super funds, so it generates income for future employees retirement.

Here’re some quick tips and reminders around superannuation: