2 October 2007

Superannuation Guarantee Compliance Made Simpler for Small Business

The Minister for Revenue and Assistant Treasurer, Peter Dutton, today announced changes that will mean employers who make a late Superannuation Guarantee (SG) payment do not pay the same amount twice.

Employers are required to make SG contributions on behalf of employees quarterly.  When an employer does not make their SG contribution on time, they become liable for the SG charge.  The SG charge includes the amount of the contribution plus interest and an administration fee and is directly payable to the Tax Office.

The SG charge generally includes the amount of the late contribution; even where the employer has paid the amount into a superannuation fund, albeit late. 

“The Government will amend the law to ensure that employers will not have to pay the contribution twice,” Mr Dutton said.

“Ultimately, the employer has already made their SG contribution for the employee.  However, employees will still be entitled to interest to compensate them for the late payment.”  

“The Tax Office continues to pursue employers who have SG debts owing to their employees.  Penalties and interest will continue to be imposed on employers who fail to make their SG payment on time,” Mr Dutton said.

The Government provided additional funding of $125.7 million over four years in the 2007‑08 Budget to enable the Tax Office to enhance its debt collection capability.  This is in addition to the additional funding provided in the 2006-07 Budget to improve the responsiveness of the Tax Office to employee inquiries about compliance with the SG arrangements.

The changes to the law will take effect from the date of Royal Assent of the amending legislation.  From Royal Assent, employers will be able to use the offset, including employers who have already been assessed with the SG charge and which remains unpaid at Royal Assent.

Until the changes become law, employers who are in these circumstances should contact the Tax Office to discuss their situation.