One of the most important employer obligations is the compulsory SGC (Super Guarantee Charge).  All employers are required to remit 9.5% of their eligible employee’s ordinary time earnings (OTE) as SGC.

Ordinary time earnings are generally what your employees earn for their ordinary hours of work, including:

  • Over-award payments
  • Certain bonuses
  • Commissions
  • Shift loadings
  • Certain allowances

Certain payments to employees are excluded from OTE & hence are not subject to SGC, including:

  • Termination payments for unused annual, sick or long service leave
  • Overtime
  • Christmas bonuses and “ex-gratia” payments
  • Annual leave loading

In order for the employer to claim a tax deduction for Superannuation (SGC) paid on behalf of eligible employees, the payment MUST be received by the relevant employees Superannuation Fund by the due date (the due date is 28 days after the end of each financial quarter).

If the employer fails to do this, the employer is required by law to lodge an SGC Form by the 28th day of the month following the SGC due date, along with payment for the amount of SGC, an administration fee and interest charges.  This is lodged with the ATO.

The due dates for payment of SGC are as follows:

QUARTER DUE DATE  FOR PAYMENT OF SGC
September (1 July to 30 Sept) 28 October
December (1 Oct to 31 Dec) 28 January
March (1 Jan to 31 Mar) 28 April
June (1 Apr to 30 Jun) 28 July

 

It is crucial that employers be aware, that non payment of their SGC obligations by the due date will result in the payment being treated as not tax deductible.

Please also note that the compulsory SGC will remain at 9.5% until 1 July 2021, when it will increase to 10%.