Many businesses fail to pay their superannuation on time. This can happen due to a number of reasons such as cash flow issues, having poor planning or simply because they are too busy to even think about it. Any experienced tax accountant in Sydney can tell you that if you’re late for your superannuation payments even by one day, you can miss tax deductions; you may have to pay hefty fees or you can even invite a tax audit. So, what are some key superannuation regulations? Let’s have a look:
- – Superannuation is paid to the employees once they earn $450 or more in a month.
- – For the year 2016-17, the superannuation obligation is 5% of OTE (Ordinary Time Earnings). You can get more information on OTE by visiting ATO site or by simply asking a good tax accountant in Sydney about it. OTE doesn’t consist of total employee’s earnings. For instance overtime payment is not included to calculate ordinary time earnings.
- – It’s mandatory for all employers from 1 July 2016 to pay their super guarantee liability using an electronic portal called ‘Superstream’. A tax accountant in Sydney who specializes in accounting and bookkeeping services can give you a detailed explanation of Superstream approved methods of paying super.
So, what can happen if you don’t meet your super guarantee obligations?
- You may be liable for a range of penalties or charges on top of the super guarantee charge. The penalties include:
- – Director Penalties: The directors of the company that fails to meet an SGC liability in full by the due date automatically becomes personally liable for a penalty equal to the unpaid amount.
- – General Interest Charges: If you lodge an SGC statement but don’t pay the charge by the due date, you incur as additional charge – the general interest charge (GIC). It accrues from the date your SGC is due up to the date you pay your SGC account in full.
- – Administrative penalty: If you pay less SGC than you should because you made a false or misleading statement, ATO can impose an administrative penalty. The base penalty amount can be up to 75% of the shortfall.
- – Other penalties such as Failing to keep records, Failing to provide an SGC statement when required and Failing to pass on a TFN may also be applied.
- If you’ve delayed your super payments, you won’t be able to claim tax deductions. This means that at the end of the financial year, you can expect a substantially higher income tax bill.
- If you fail to pay the minimum superannuation payment, it can result in an Employer Obligation Audit. This is normally done by the ATO to ensure that your business processes are compliant with the legislation.
As a trusted tax accountant in Sydney, DSV Partners can help you with top notch bookkeeping services and accounting solutions, and ensure that all the crucial payments are made well before their due dates. For more information, get in touch with DSV Partners today!
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