Super guarantee penalties

If you do not meet your super guarantee (SG) obligations, you may have to pay additional penalties or charges on top of the super guarantee charge (SGC).

Fail to provide an SGC statement when required

You're liable for a Part 7 penalty – Superannuation Guarantee (Administration) Act 1992 (SGAA) if you:

• lodge your SGC statement late, or

• fail to provide a statement or information when requested during an audit.

The maximum penalty is 200% of the SGC.

Administrative penalty

If you pay less of the SGC than you should because you made a false or misleading statement, you may receive an administrative penalty.

The base penalty amount can:

• be up to 75% of the shortfall

• vary according to your situation.

Avoiding your super obligations through arrangements

If you make arrangements to avoid super guarantee obligations, you may incur the charge you avoided plus an additional penalty.

Director penalties

If you are a director of a company, you need to pay the SGC in full by the due date. If you do not, you'll be liable for a penalty equal to the unpaid amount.

When an SGC amount remains outstanding, we may issue a director penalty notice. Even without issuing a notice, we can collect the penalty by other means. For example, by withholding a tax refund.

The penalty is reduced if your company pays the outstanding amount at any time. Under some conditions, it may be reduced if your company goes into voluntary administration or liquidation.

General interest charge (GIC)

This additional charge applies if you:

• lodge an SGC statement, or

• we have raised SGC assessments but you do not pay the super guarantee charge by the due date.

GIC:

• will continue to increase from the date your SGC is due up to the date you pay your SGC amount in full

• is calculated on a daily compounding basis

• is tax-deductible in the year you incur it.

Additional penalties

Choice shortfall

If you do not comply with your choice of fund obligations you could receive a 'choice shortfall' penalty.

A choice shortfall penalty applies if you:

• do not give your eligible employee a Superannuation standard choice form within the required timeframe

• pay your eligible employee's super to a complying fund but not the fund they chose or not their stapled super fund (if one exists) for a new employee from 1 November that did not choose a fund – you can request stapled super fund details for employees from us

• charge your employee a fee for implementing their choice of fund.

The choice shortfall penalty increases the SGC.

Failing to keep adequate records

The maximum fine for an individual convicted of failing to keep records is 30 penalty units. You may also be liable for an administrative penalty of 20 penalty units.

Failing to provide employee's TFN to super fund

If an eligible employee has provided a TFN to you and you do not provide the employee's TFN to their super fund or retirement savings account within the required time, you're liable 10 penalty units.

The TFN is required at the time you make the super guarantee contribution. If the employee provides the TFN to you less than 14 days before the next contribution, you must pass on the TFN within 14 days.

Source: ato.gov.au
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/businesses-and-organisations/super-for-employers/missed-and-late-super-guarantee-payments/super-guarantee-penalties.

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