Basic rules
If you don’t pay superannuation on time – and it builds up – you will get – financially – slaughtered by an audit, and the fines and fees could break you.
At Your Business Angels, we have had wins and successes in negotiating tax debt, but we have never had a win in negotiating fees and fines on superannuation.
As an employer, paying your eligible employees super guarantee (SG) at least 4 times a year is compulsory. The minimum SG rate you must pay for each eligible employee is 11% of their ordinary time earnings (OTE). This is scheduled to increase to 12% on 1 July 2025 progressively.
Super is an entitlement under the NES. This means that most employees covered by the NES can take court action under the Fair Work Act to recover unpaid super unless the ATO has already commenced proceedings about that super.
Employers who do not pay the correct super for their employees have to pay a superannuation charge, which is made up of the shortfall amount, interest on that amount (currently 11%) and an administration fee.
Failure to abide by a direction to pay superannuation can result in a fine of up to $10,500- or 12 months imprisonment.
If you’re self-employed as a sole trader or in a partnership, you don’t have to pay a super guarantee for yourself. You can choose to make personal super contributions to save for your retirement. HOWEVER – if you trade within a company and earn your salary from that company, you must pay yourself superannuation like any other employee.
Helpful hints
