• New Wave Accountants

What is a Super Guarantee and Why Is It An Important Obligation For Your Business?

Many businesses aim to become a super employer, but one of the biggest factors that can quickly turn your employees against you is if you fail to pay your employees the superannuation payment they’re owed when it’s due.

It’s required by law that employers stay on top of paying an employee the funds to cover for their retirement plans, making it a super responsibility that businesses can’t take lightly. It’s easy to think it’s another expense you have to pay in the course of your business, but failing to pay on time or in full can have serious repercussions.

What is the Superannuation Guarantee?

Also known as a super guarantee charge, it’s a compulsory amount that all employers are required to pay eligible employees. It’s a standard part of their employment conditions, wherein the total amount can be calculated by taking the percentage of the employee’s ordinary time earnings (OTE).

Employees who are above 18-years-old and earn $450 a month before tax, be it as a full-time or part-time worker, are entitled to superannuation. With that in mind, employers need to make the super guarantee payment before or within 28 days by the end of each quarter. Failing to meet the due date can result in the super guarantee charge. Consider the superannuation schedule below:

superannuation schedule
superannuation schedule

What is the Super Guarantee Charge (SGC)?

If your business fails to pay the super guarantee for your employees on time or in the correct amount, you have to pay the super guarantee charge as a consequence, which is often non-tax-deductible.

A super guarantee charge involves penalties like paying for an administration fee of $20 per employee every quarter. The ATO will transfer the SG shortfall amount to the employee with a boosted interest rate of 10 percent.

To calculate the SGC shortfall for each employee, you need to reach the difference between the required contribution and actual support given by the employee.

How Employers Can Pay The SGC

One of the biggest challenges of the SGC scheme is that it is often self-appraised, which means you, as the employer, need to handle the report and identify any missed super contributions on top of paying for the SGC.

You also have to handle the SGC statement too, which involves alerting the ATO that you have failed to meet your super obligations. Failing to submit an SGC statement on time can result in graver penalties, giving the ATO the liberty to levy up to a whopping 200 percent charge amount.

The Bottom Line: How Professional Accountants Can Help You With SGC Payments

Dealing with SGC payments can be overwhelming and act as a bottleneck to your productivity, especially when all you want to do is focus on running your business. If you’re looking to handle your super guarantee payments correctly on the first-go, hiring professional accountants with relevant experience handling super guarantee payments and super guarantee charges is crucial.

Suppose you’re looking for reliable accounting and bookkeeping services in Mermaid Beach to manage the super guarantee and avoid penalties for your small business. In that case, we’re the best accounting firm to call! Contact us at (07) 55041999 and see how we can help you!

1 view0 comments


We have saved our clients $2 million in tax over the last 12 months with the 5 unbelievably powerful strategies outlined in this free report.
Download it now and implement the strategies before the ATO changes their rules. 
Thanks for submitting!