Superannuation Guarantee Tax:

A superannuation guarantee charge is incurred by employers as a result of a failure to pay the required amount of guaranteed superannuation to their employees on time. The Superannuation Guarantee charge is governed by federal laws and regulations. It is a good idea to speak to a superannuation lawyer or tax solicitor to find out your rights and obligations.

The current guaranteed amount payable by employers is 9% of the employee’s ordinary time earnings and is payable quarterly. Contributions are to be made within 28 days of the end of the quarter. Employers who fail to meet the above requirements are said to have a superannuation guarantee shortfall and are liable to pay the superannuation guarantee charge for the quarter. The superannuation guarantee charge comprises three elements being, the shortfall, interest and an administrative charge with the shortfall amount plus any interest payable by the ATO to the employee’s superannuation fund.

Penalties apply for failure to notify the ATO of an SG shortfall within time and include additional SG charges, general interest charges and criminal penalties under the relevant legislation. These penalties may be objected to upon application.

Our Taxation Lawyers can advise you on the various penalties and assist you, where applicable, with lodging an objection in the event a penalty you have received is harsh or unjust. 

Not every person who does work for an employer will be classed as an employee and therefore be covered under the legislation. An example is, independent contractors who are generally not considered employees but may be considered such if the relationship reflects that of employer and employee rather than that of contractor and contractee. There are many examples of exempt employees to further confuse the matter. This area is complex and requires examination on a case by case basis.

Similarly, while payments made to an employee such as salary, wages or earnings attract superannuation other payments such as fringe benefits, very low salaries and payments to part time employees under the age of 18 do not attract superannuation. Our Tax Solicitors can advise you on your liability, if any, with respect to employees or other persons carrying out work for you and on their payments to help reduce your running costs.

For quality and professional Taxation advice, we invite you to contact our firm to speak to one of our dedicated Sydney Taxation Solicitors. To book, please call (02) 9233 4048 or send an email to info@navado.com.au. 

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