Murray Howlett, head of taxation for chartered accountancy firm Pilot Partners, said the increased visibility of employer compliance with super laws as a result of STP had seen penalties ramped up for even small delays in payment of the SG.
This was of particular concern given the payment date for quarterly SG entitlements fell on 28 January, the day after the Australia Day long weekend.
“Last year, we saw many clients who were caught out by the new data-matching system over the Australia Day long weekend,” Mr Howlett said.
“We expect that number to increase significantly now that the STP system has been expanded to cover all employers. We need to send a strong message to employers before they go on holidays that they need to manage their payroll and bring forward their super guarantee payment date three or four days earlier to give themselves room for error.”
Since the expansion of the STP system to all employers this financial year, businesses of all sizes must report their employees’ payroll information including super, salaries, wages and pay-as-you-go withholding to the ATO as soon as they are paid.
Mr Howlett said interest fees charged to employers for late payment of the SG could be up to $40,000 for payments between one and four days late. Late payment charges were calculated based on employees’ salaries and an additional 10 per cent interest fee.
“There is no doubt the penalty is disproportionate to the crime,” he said.
“Even though you may pay super to your employees one day late, the problem isn’t fixed. If you’re late, you not only have to pay the late super, but you also need to lodge the super guarantee charge form, otherwise interest will continue to accrue.”
He added that company directors were personally liable for the interest debt accrued due to non-payment of super and should be aware of the ramifications.
“The director of a company who fails to meet a super guarantee charge liability in full by the due date automatically becomes personally liable for a penalty equal to the unpaid amount,” Mr Howlett said.
“Super penalties are a big one and directors need to know that they can be personally liable for penalties and interest for not paying the super on time.”
When an employer pays (has the funds transferred from their bank account) before the SGC due date how can an employer know when the funds are “received” by the super fund ? Why does it take up to 7 days (18th to 25th July 2019 and 12th to 19th Sept 2019) for MYOB to get the funds into the nominated account ? Where do the funds go ? Are these funds guaranteed by the Australian Government ? My wife’s pay period sometimes ends on Monday at 8:00 pm – Her pay is in our account on Wednesday and her super is in our SMSF on Thursday !