What happens if you don’t meet your Super Guarantee obligations

As an employer, you are required by law to make superannuation guarantee (SG) contributions on behalf of your employees, at least quarterly. We know it’s easy to overlook obligations like these amidst the daily whirlwind of running a business, however, negligence with super guarantee payments can lead to severe consequences.

The implications of neglecting SG obligations

Failing to meet your SG obligations isn’t just a matter of procrastination – it’s breaking the law!

If you have not paid SG contributions to an employee’s super fund in full, on time and to the right fund, you need to lodge a statement to the ATO and pay a Super Guarantee Charge (SGC).

The SGC comprises three components:

1. The SG shortfall amount:

This occurs when employers fail to pay the full SG contribution or don’t adhere to their choice of fund obligations. Note: the SG shortfall is calculated based on employees’ full salary and wage amounts, not just their Ordinary Time Earnings (OTE).

2. Interest on the shortfall amount:

Currently a hefty 10%, nominal interest is calculated from the first day of the quarter that the SG was not paid until the ‘lodgment day’. Note: Once you become liable to pay the SGC, this accrues at least until the due date.

3. Administration Fee:

Currently $20 per employee, per quarter.

Additional penalties for neglecting SGC requirements

Employers who fail to lodge their SGC statement and pay the SGC by the due date face additional penalties on top of the SGC. These are quite aggressive and can escalate quickly. Two common and painful penalties are:

1. Failure to provide a SGC statement:

Late submission or failure to provide requested information during an audit can result in penalties of up to 200% of the SGC.

2. False or misleading statements:

Making false or misleading statements leading to underpayment of the SGC may trigger administrative penalties of up to 75% of the shortfall amount.

These penalties not only dent the bottom line but also tarnish the reputation of the business. They serve as a stark reminder of the importance of diligent adherence to SG obligations.

How to prepare and lodge your SGC statement

To report and rectify a missed SG payment, lodge a Super guarantee charge (SGC) statement and pay the SGC by the due date. Get the SGC statement and instructions for lodging it here:

Taking control of SG compliance

Levergare technology:

Employers must pay SG contributions to employees’ super funds according to the SuperStream standards, which requires that payments and data are sent electronically in a standard format. A Synectic adviser can assess the different methods available under SuperStream and set up the right electronic solution for your business. We can help you leverage technology solutions to streamline SG processes and minimise the risk of non-compliance.

Be proactive:

  • Keep abreast of SG regulations and deadlines to ensure timely compliance. Synectic post reminders and updates on our social media channels so keep an eye out.
  • Address any discrepancies or issues promptly, avoiding the accumulation of penalties and legal complications.

What next

While the demands of running a business may seem endless, overlooking SG obligations, including lodging your SGC statement, is a gamble not worth taking. Remember, compliance isn’t just a box to check—it’s a cornerstone of sustainable business practices.

Contact a Synectic adviser today to take control of your SG compliance.

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About the author

Sharni Jago Accountant Devonport Tasmania

Sharni Jago
Senior Accountant

Sharni is a Chartered Accountant with extensive tax and accounting and business advisory experience. She is passionate about building lasting relationships that allow her to get up close and truly help her clients. Sharni specialises in supporting small to medium business owners. Contact us today and ask to speak with Sharni.

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Energy Efficiency Grants for Tasmanian businesses

Grants of up to $25,000 are now available to Tasmanian businesses to help improve your energy efficiency!

What is the program about? 

The Energy Efficiency Grants for Small and Medium Enterprises Round 2 program is now open to eligible Tasmanian businesses, offering grants of up to $25,000 to support your transition towards a more sustainable and cost-effective future. 

This initiative aims to empower Tasmanian businesses with resources to reduce their energy consumption and environmental impact.

By implementing eligible energy-saving measures, you can:

✅ decrease your energy bills, and

✅ contribute to a greener Tasmania.

Who is eligible to apply?

You may be eligible to apply for round 2 of the Energy Efficiency Grants if you:

  • operate a small or medium sized business in Tasmania with 1-199 employees
  • have be in operation for at least 24 months

What activities are eligible? 

While you cannot use the grant for activities such as purchasing solar panels or replacing broken equipment, here are some eligible options to consider: 

  • Feasibility studies: Unsure where to begin? Engage a Synectic adviser to help you assess the potential of energy-saving investments like equipment upgrades, building improvements, or renewable energy solutions (excluding purchase of equipment). We’ll analyse costs, savings, and return on investment, giving you a clear picture of the benefits. 
  • Equipment upgrades: Replace outdated, inefficient equipment with energy-efficient models, such as lighting systems, refrigeration units, and HVAC systems. 
  • Building improvements: Invest in insulation, ventilation upgrades, and smart building technologies to optimise energy use throughout your facility. 

What next?

Applying for Energy Efficiency Grants for Small & Medium Sized Enterprises Round 2

  • Applications open on February 27, 2024
    Funding is limited so submit your application as soon as possible
  • Applications close on April 8, 2024. 

We’re here to help!

Our team can provide guidance on navigating the application process and exploring suitable energy-saving solutions for your business. Reach out to a Synectic adviser to discuss your specific needs.

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Feel free to celebrate, but make sure you don’t get stung with unexpected taxes. FBT and associated income tax and GST pitfalls are the big ones to watch out for.

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As a Dext partner, we can help you streamline your bookkeeping processes, allowing you to focus on what matters most – growing your business. Through our partnership, our clients can also benefit from discounted pricing on Dext Business plans.

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Cyber criminals are always looking for loopholes and vulnerabilities in your organisation’s technology infrastructure, hoping to disrupt operations or access sensitive data. It’s vital that SMEs and NFPs take proactive action to reduce these cyber risks.

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In the digital world we live in, managing people’s personal information and data has never been more important. Almost half of all cyber-attacks target small-to-medium sized businesses, and half of all data breaches result from cyber-security incidents, so knowing what your legal obligations as a small business are is critical. With the Privacy Legislation Amendment Bill 2022 passed late last year, maximum penalties that can be applied for non-compliance, serious, or repeated breaches of the Privacy Act have increased. The Bill also provides the Office of Australian Information Commissioner (OAIC) with enhanced enforcement powers and strengthens the Australian Notifiable Data Breaches scheme.

Do Privacy Act obligations affect your small business?

While most small businesses are not covered by the Privacy Act 1988, some are.

A small business is one with an annual turnover of $3 million or less. Annual turnover for the purpose of the Privacy Act includes all income from all sources – it does not included assets held, capital gains or proceeds of capital sales.

However, regardless of turnover, the Privacy Act covers any business that is:

  • A health service provider
  • Trading in personal information
  • A contractor that provides services under a Commonwealth contract
  • An operator of a residential tenancy database
  • A credit reporting body
  • A reporting entity for the purposes of the Anti-Money Laundering and Counter-Terrorism Financing Act
  • Employee associations registered or recognised under the Fair Work (Registered Organisations) Act 2009
  • A business that conducts protection action ballots
  • A business accredited under the Consumer Data Right system
  • Businesses related to a business the Privacy Act covers
  • A business prescribed by the Privacy Regulation 2013
  • A business that has opted in to be covered by the Privacy Act

If the Privacy Act covers your small business, you will have to comply with the Australian Privacy Principles (APPs). As well as the APPs, the Privacy Act includes specific matters that some small businesses may be required to comply with.

Ten tips for protecting customers’ personal information

  1. Familiarise yourself with internal privacy policies, processes and procedures
  2. Know who is responsible for privacy
  3. Consider privacy during project planning
  4. Only collect the personal information you need
  5. Use and disclosure – think about it!
  6. Overseas disclosure – prepare for it!
  7. Take care when handling sensitive information
  8. Access personal information on a need-to-know basis
  9. Keep personal information secure
  10. Familiarise yourself with your data breach response plan – you should have one

Need more help?

Still unsure whether the Privacy Act applies to your small business, or need help ensuring you have appropriate systems and processes in place to comply?

A Synectic adviser can review your needs and provide advice on what you need to do to meet your obligations.

Contact us

About the author

Claire_Smith - Senior_Consultant - internal audit Tasmania
Claire Smith (FCPA)
Senior Consultant

Claire is a senior executive and accountant with almost 20 years’ experience across the private and public sectors. She is an Associate Member of the Institute of Internal Auditors, an Internal Quality Auditor, and an independent member of the Department of Treasury and Finance Audit & Risk Management Committee. Claire is passionate about business performance and has an extensive background in risk management. Contact us today and ask to speak with Claire.

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