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.