When do employers need to pay super contributions?

 

Paying super: when, how and why you can’t get it wrong

Employer’s guide to paying superannuation

As an employer, it is your obligation to pay your employees’ superannuation contributions on time and in accordance with their choice of fund.¹

It’s a serious professional responsibility (and fiduciary duty) and failure to meet your obligations could attract unwanted attention from the Australian Tax Office (ATO).

Luckily for employers, there is plenty of information available to guide you on how to do the right thing.

When do I pay my employees' super?

It is essential employers pay super contributions on time to avoid penalties.² Presently, the law requires employers to pay at least four times a year, at the end of each financial quarter. The due dates for payment are set at four weeks after the end of the quarter.

If the due date falls on a weekend or public holiday, the ATO allows payments to be made on the next business day. You also need to factor in processing times of your super fund to ensure contributions processed by the due date.

Making more frequent payments

You can pay more frequently if you wish – indeed, some super funds, awards and contracts require increased payment frequency – and that’s fine, as long as the amount owing for the quarter is paid in full by the due date.

These stipulations apply only to the 11% – as of 1 July 2023 but rising to 11.5% on 1 July 2024 – of ordinary time earnings (OTE) required to be directed to a fund under the Superannuation Guarantee (SG) rules.

When staff want to make extra super contributions

If an employee has an arrangement with you to make extra after-tax payments to their super fund, these are not tied to the due-date requirements and don’t count as part of your SG payment obligation and should be transferred to the nominated fund promptly.

An important detail to keep in mind is that an employee's super contribution is counted as being paid on the date their fund gets it, not the date the money is sent. More information about “clearing houses” used by some employers to distribute super payments on their employees’ behalf can be found here.

What if I miss a payment deadline for my employees' super?

If you don’t pay the necessary SG amount (which is tax deductible as a business cost) by the due date, it is going to cost you money. You will be required to report the delay to the ATO and pay a Super Guarantee charge.³

The charge, which is not tax deductible, is made up of the payment shortfall, accruing interest (the current rate is 10%) and administration fees. You must pay the charge by a new due date, which is a month after the original super contribution payment due date. Employers can apply for an extension of time to pay.

Continued avoidance is a serious matter. The ATO has a range of options to recover money owed to employees, and some hefty penalties for employers who don’t comply.

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1. Super for employers | Australian Taxation Office (ato.gov.au), accessed 23 May 2023.
2. Missed and late super guarantee payments | Australian Taxation Office (ato.gov.au), accessed 23 May 2023.
3. Super payment due dates | Australian Taxation Office (ato.gov.au), accessed 23 May 2023.

This content is provided for information purposes only using sources that we believe are reliable and accurate at the time of publication. We make no representations as to accuracy, completeness, suitability, or validity of any information provided and you should get professional advice for your own circumstances.