The ATO (Super for employers) reports that common superannuation mistakes include:
- Not paying enough super for employees
- Missing the due dates
- Not keeping accurate records
- Not passing on the employees TFN to their super fund
- Not understanding when super should be paid for contractors
- Error recovery
1. Not paying enough super for employees
The amount of super you must pay employees is set out by law. This is currently set at 9.5% of each employee’s ordinary time earnings (OTE). ‘Ordinary time earnings’ is generally what employees earn for ‘ordinary’ hours of work, including over-award payments, commissions, certain allowances, and paid leave, but not including overtime in most cases. Use the ATO checklist to help calculate OTE.
2. Missing the due dates
- If you don’t pay the SG on time, you may have to pay a fine.
|SG quarter||Date payment due|
|1 July – 30 September||28 October|
|1 October – 31 December||28 January|
|1 January – 31 March||28 April|
|1 April – 30 June||28 July|
The ATO provides more details about super guarantee.
Missing a payment could result in paying a fine. At Sunsuper, we’ll do everything we can to help you make payment deadlines. Find out more about important dates and deadlines.
If you miss the deadlines, you may have to pay an SG charge. Unfortunately, this charge isn’t tax deductible. While we do accept the payment of Super Guarantee contributions after the due date, you will still be liable to pay the superannuation guarantee charge to the ATO. Also, please be aware that even if you are audited by the ATO, Sunsuper is unable to return your late payment. Find out more about how the ATO deal with missed and late payments.
3. Not keeping accurate records
You are required to keep records that explain your super transactions, including documents that show how you calculated the amount of super you paid for each employee. These records need to be easily accessible and kept in English, or in a format easily converted. Records must be kept for five years.
4. Not passing on the employees TFN to their super fund
Providing your employees' tax file numbers (TFNs) is very important. If you don’t provide your employees’ TFNs to their super fund, they may pay more tax on their super than necessary and they won’t be able to make any voluntary contributions.
When an employee has given you their TFN, the law requires that you pass it on to their super fund. It is generally required that you do this when you next make a contribution for any employee who has given you their TFN. However, if you receive an employee’s TFN within 14 days of sending your contribution for the employee, then you have up to 14 days from receiving the TFN to pass it on to the fund.
5. Not understanding when super should be paid for contractors
Generally, employees who are paid $450 or more (before tax) in a calendar month and work on a full-time, part-time, or casual basis should receive super contributions.
Employees may not qualify for SG payments if they are under 18 or a private or domestic worker and work less than 30 hours per week. Get help determining your employees’ eligibility with the ATO’s SG eligibility decision tool.
6. Error recovery
If a date or amount is missed then a Superannuation Guarantee (SG) Charge Statement should be lodged and often it isn’t. Find the instructions and download the ATO’s Superannuation Guarantee Charge Statement.
By Claire Burke-Atcheson, Manager of Digital Distribution, Sunsuper
The views of the author and those who provided the responses to the comments posted on the Knowledge Centre are not necessarily the views of the Sunsuper Board. While Sunsuper attempts to make a wide range of information available via the Knowledge Centre it may not cover all the options available to you. We’ve put this information together as general information only and as such it doesn’t take into account your personal financial objectives, situation or needs. You should get professional advice before relying on this information.