Pilot Partners head of taxation Murray Howlett said late superannuation guarantee payments are a common trap with public holidays and long weekends, noting that the next quarterly payment due date comes after the Australia Day long weekend on 28 January.
With the expansion of Single Touch Payroll (STP) to include all businesses from 1 July 2019, giving the ATO “unprecedented levels of visibility” around late SG payments, Mr Howlett believes there will be more instances of employers being caught out.
“Last year, we saw many clients who were caught out by the new data-matching system over the Australia Day long weekend,” Mr Howlett said.
“We expect that number to increase significantly now that the Single Touch Payroll system has been expanded to cover all employers.
“We need to send a strong message to employers before they go on holidays that they need to manage their payroll and bring forward their superannuation guarantee payment date three or four days earlier to give themselves room for error.”
Mr Howlett believes directors should be fully across the SG regime, previously criticised as “draconian”, to ensure they were aware of their obligations.
“There is no doubt the penalty is disproportionate to the crime,” Mr Howlett said.
“Even though you may pay superannuation to your employees one day late, the problem isn’t fixed. If you’re late, you not only have to pay the late super, but you also need to lodge the superannuation guarantee charge (SGC) form, otherwise interest will continue to accrue.”
He added: “The director of a company who fails to meet a SGC liability in full by the due date automatically becomes personally liable for a penalty equal to the unpaid amount.
“Superannuation penalties are a big one and directors need to know that they can be personally liable for penalties and interest for not paying the super on time.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.