What Happens if I Pay an Employee’s Super Late?

You’re busy, business is hectic, and a few things have fallen behind, so the next thing that enters your head is what happens if I pay an employee’s super late?

Although it’s not the best situation to place yourself or your business in, there are some solutions.

To find out more, continue reading below or get in touch with Confidential Tax & Business Services for further advice by phoning us on 07 3267 2111 or send a message here.

Late Super Payments

Not paying an employee’s super on time makes you liable for the Super Guarantee Charge (SGC), even if you happen to make the payment at a later date.

There are two things you may be able to do to rectify the situation, but both have time limits:

  • You can use the late payment offset to reduce the amount of SGC you must pay.
  • Carry the late payment forward as a pre-payment of a future super contribution for the same employee.

Late Super Payment Offset

In most cases, you can offset late payment amounts against the SGC if you:

  • Made the payment to your employee’s super fund.
  • Made the payment before the date the SGC assessment was made (must be original assessment).
  • Lodge a late payment offset election with the ATO within 4 years of the original SGC assessment date.

If you choose to use a late payment to reduce your liability for SGC, it’s not tax deductible; can’t be used as prepayment for current or future super contributions and you are unable to change the offset amount or revoke your election.

Carry Forward a Late Super Payment

You can use your late payment towards your super guarantee contribution in the quarter it was actually paid or a future quarter. However, this can only be done if it’s for the same employee or the start of the quarter is within 12 months after payment date.

You can’t claim a late payment offset for contributions you have used as a prepayment for current or future periods but if you carry a late payment forward, it is tax deductible in the year you have paid it.

Before making any decision on which option is best for you, we highly recommend you seek advice from CTBS or your tax adviser.

What Happens if I Pay an Employee’s Super Late?

Come and see the CTSB team for the best advice on your situation. Give our office a call on 07 3267 2111 to arrange a meeting.

CTBS can deliver you expert knowledge and guidance across a broad spectrum of business needs. We provide services in Asset Protection, SMSF Establishment and Advice, Financing, Business Advice & Compliance, Tax Planning and Restructuring.

Whether it be a service directly offered or a referred service such as legal advice, the team at CTBS will be able to provide a solution for your business. Call CTBS today or submit an online enquiry here.