Pay runs past July 1 must be payday super compliant, meaning employers have less than 24 hours to ensure their payroll and accounting systems are ready for the landmark transition.
Businesses now have one last chance to stress-test their processes before the payment of superannuation guarantee (SG) contributions aligns with the payment of qualifying earnings.
From July 1, employers must ensure SG contributions land in their employees’ super funds within seven days of payday.
This will replace the existing super system, which allows employers to pay SG contributions on a quarterly basis.
The Australian Taxation Office (ATO) has released guidance on how employers should handle the transition, and the final round of quarterly SG contributions for the quarter ending June 30.
Employers can use the existing SG rules for any payments made to workers between April 1 and June 30, with SG contributions for that quarter due by July 28.
But from July 1, SG contributions must be processed at the same time as qualifying earnings — even if those earnings were for work completed before July 1.
Employers should also beware of accidental payday super shortfalls.
The ATO stresses that any SG contributions on or before July 28 will pay down any SG owing for the June quarter before paying down the amounts owed for later pay runs.
Should an employer contribute too much SG to the final June quarter payment, the excess will be processed in respect of amounts owed under the payday super system.
The transition is obviously complex and could be complicated by data suggesting many employers and workers are still unaware of the change.
The ATO also has the power to level penalties on businesses falling short of their obligations.
While stressing businesses have a responsibility to pay their workers’ entitlements, the tax office also says it will not hammer employers doing their best to handle their changing obligations.
You can learn more about payday superannuation here, and read the ATO’s year one guidance here.
- This article first appeared on SmartCompany. You can read the original here.
