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Superannuation guarantee charge – risks & hidden costs


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We have recently seen a rise is employers encountering significant superannuation guarantee charge (SGC) issues as a result of paying employees superannuation late.

Even a delay of a week or two can result in significant consequences if SGC forms are not submitted promptly, given that interest continues to accumulate until the form is lodged, irrespective of whether the super has been paid.

It is possible to treat late contributions for one quarter as advance contributions for a future quarter, but this can be a time-consuming exercise, particularly when there are multiple quarters and employees with different start and finish dates.

While the SGC savings can be substantial, the work involved should not be underestimated, and clients should be informed of the risks and potential consequences of not addressing this issue.

Always try to address SGC forms as soon as possible after discovering that a client’s superannuation has been paid late and ensure that the consequences are communicated clearly with the client.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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