September 2013 Newsletter 

In this edition:

Welcome

Election 2013: A summary of key tax and business policies

ATO to target unpaid employee super

Compliance in Focus

What is Diversified Investing and why do it?

Superannuation Guarantee (SG) is the official term for compulsory superannuation contributions made by employers on behalf of their employees.

An employer, regardless of whether they are a small or large business, must make super contributions at least quarterly, based on the equivalent of 9.25% of an employee's Ordinary Times Earnings (OTE) (prior to 1 July 2013, the SG guarantee percentage was 9%, and it is due to rise again to 9.5% from July 2014).

It has come to the ATO's attention that many businesses are failing to pay their employees superannuation guarantee entitlements. Consequently the ATO has indicated they will be targeting these businesses over the next 12 months as part of their compliance program, with particular attention paid to the road freight/transport, automotive repair, carpentry, real estate services, hospitality and electrical services industries.

When do you need to pay your employees' Superannuation Guarantee?

Payment period                        SG quarterly cut-off payment date     
1 July – 30 September                  28 October                     
1 October – 31 December                28 January                       
1 January – 31 March                    28 April                       
1 April – 30 June                                28 July 

What you must do if you haven't met your super obligations
Business who fail to meet their superannuation obligations much lodge a Superannuation Guarantee Charge Statement and pay the superannuation guarantee charge directly to the ATO.

This is required where a business:

• Doesn't pay sufficient super contributions for its employees (known as a super guarantee shortfall);
• Doesn't pay super contributions by the above quarterly cut-off payment dates; or
• Doesn't pay super to its employees' chosen super fund (known as a choice liability).

The Superannuation Guarantee Charge is made up of the super guarantee shortfall amounts, interest at 10% per annum, and an administration fee of $20 per employee per quarter.

The Superannuation Guarantee Charge is also not tax deductible. 

Director Penalties
Following changes to the director penalty regime, from 1 July 2012 company directors can also now be held personally liable for unpaid superannuation contributions.

Under these changes, a company's superannuation guarantee charge is treated as payable on the day the employer is required to lodge their superannuation guarantee statement for the quarter with the ATO (generally one month and 28 days after the end of a quarter), regardless of whether or not that statement is actually lodged.

Further, where a superannuation guarantee statement has not been lodged, the ATO can assess the employer on an estimated amount of superannuation guarantee, and the onus is on the employer to refute or verify the amount.

If you are having trouble paying your employee's superannuation in full and on time, or if you have any questions in relation to any aspect of superannuation guarantee, you should contact your Goodwin Chivas & Co advisor to discuss your options.