The Australian Taxation Office has warned employers only have a few days left to send superannuation contributions to workers’ funds. (Source: ATO/Getty)
Australian business owners have been warned they only have a few days left to lodge their employee superannuation contributions. Known as the super guarantee (SG), these payments need to be made every quarter.
October 28 marks the next deadline for employees who worked from July 1 to September 30. But the Australian Taxation Office (ATO) said business owners should be getting their affairs in order now.
“To meet this deadline, you’ll need to make payments early enough to allow for processing times,” the tax office said.
“Payments must reach their super fund by this date to be considered paid on time.”
Failure to have the funds transferred by the October 28 deadline can result in serious penalties.
Employers can be liable for a penalty equal to or up to 200 per cent of the unpaid amount, be hit with a general interest charge (GIC) and administration fees, and even face a director penalty notice.
This allows the tax office to collect the penalty by other means, like withholding a tax refund.
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The ATO said employers need to be aware of the major superannuation change that happened at the start of the new financial year when calculating how much to send to their staffs’ super funds.
“Remember, the SG rate increased to 12 per cent on 1 July,” the tax office reminded.
“The rate of 12 per cent needs to be applied for all salary and wages paid on and after 1 July 2025, even if some or all of the pay period it relates to was before 1 July 2025.”
The 0.5 per cent boost to the SG a few months ago was the final mandated increase from the government.
The SG has gradually been increased since 2020 when it was at 9.5 per cent.
The days of sending employee SG contributions every quarter are now officially numbered.
The government submitted legislation last week to ensure that from July 1 next year, SG contributions will have to be made every time staff are paid, which could be weekly, fortnightly, or monthly.
Funds will have to arrive in a worker’s super fund no more than seven days after their wages are sent out.
Dubbed Payday Super, the measure aims to crack down on unpaid superannuation.
The Super Members Council found 3.3 million Aussies missed out on a collective $5.7 billion in super payments in the 2022-23 financial year.
Payday Super will hopefully leave millions of Aussies better off by retirement. (Source: Getty) · FJZEA via Getty Images
That equates to an average of $1,730 each a year, which adds up to $30,000 less in a worker’s nest egg in retirement.
“The introduction of payday super legislation has been a long time coming, it’s time to get this done,” Super Members Council CEO Misha Schubert said.
“Payday super is a simple, fair and urgent reform to help ensure every dollar owed to workers makes it into their super account on time and in full. Millions of Australians cannot afford to wait.
“Payday super is also tipped to deliver an average of an extra $7,700 for working Australians by retirement because being paid your super sooner helps to grow your retirement savings faster.”
While Payday Super will be a win for everyday Aussies, employers will have to ensure they have enough cash stashed away for the much shorter super pay cycle.
The Council of Small Business Organisations of Australia (CSBOA) has called for Payday Super to be gradually phased in to give owners enough time to adjust.
CPA Australia’s superannuation lead Richard Webb said that while quarterly SG payments were outdated, the potential for “unintended consequences” with this change is “high”.
“Some small businesses will face significant cashflow challenges as they adjust to the new regime,” he said.
“This may be another compliance headache that many small businesses will struggle to cope with in such a short space of time.”
He echoed CSBOA’s calls, and said Payday Super should be rolled out over two years to give the superannuation industry and businesses sufficient time to prepare to meet the new requirements.
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