News: News Archives: Quarterly Superannuation Guarantee Contribution Payments

As from 1 July 2003 , employers will need to make Superannuation Guarantee (SG) contributions on a quarterly basis instead of an annual basis. Employers who are currently making contributions, and reporting to employees more regularly than quarterly, should continue to do so.

This means that employers should:

• Calculate an amount equal to 9% of each of their eligible employees’ ordinary time earnings (generally eligible employees are those paid at least $450 a calendar month).
• Pay this amount to a complying Superannuation provider at least once every quarter.
• Report details of the contributions to your employees in writing within thirty days of the last payment made in that quarter.
• Keep a record for the ATO of all contributions made for at least five years.
• Keep a record of when, how and what was reported to employees.

Employers must follow the following critical dates:

Employers must now now report to employees within 30 days of the final contribution for each quarter. Employers who make contributions more frequently, can choose to report every time a contribution is made. The SG report must be in writing, and must include:

• the amount of contributions made;
• the name of the superannuation provider(s) as it appears in the phone book (eg Prime Super) plus contact details; and
• the employee’s membership number, if known.

The report can be in the form of:

• a letter to employees, signed and dated by a suitable employer representative,
• an email, official notification generated by business software such as a payslip or
• a copy of the contribution receipt from the superannuation provider (sent after receipt of every contribution).

The ATO have also introduced penalties for employers who do not pay by the cut off date for each quarter or do not satisfy the reporting requirements to employees. Penalties for not reporting, of up to 30 penalty units per employee, can be applied to an employer who fails to report. Currently, a penalty unit equals $110. A penalty of up to 12 months imprisonment can be applied where an employer makes a false or misleading report.

For ATO compliance purposes it is essential that records are kept of your SG employee contribution reports for five years, which fulfil all the above reporting requirements.

A superannuation guarantee statement must be lodged if SG contributions are not made by the quarterly cut off date, along with the superannuation guarantee charge. The charge is calculated by the shortfall amount, plus interest of 10% per annum and an administration fee of $20 for each employee with a shortfall.

In order to avoid punitive SG penalties by the ATO we urge you to take note of the above changes to your payment of SG obligations.

For more information, please visit the Tax Office superannuation website at http://www.ato.gov.au/super.