Pay your super on time, to avoid missing out on claiming deductions

Written by Chris Tinta

What you need to pay

You must pay your eligible employees a minimum super contribution of 9.5% of their ordinary time earnings each quarter.  Ordinary time earnings (OTE) is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but doesn’t include overtime payments.

Super is calculated quarterly – that is, every three months (however you may elect to do it monthly).  For each of your eligible workers:

  • multiply their ordinary time earnings for the quarter by 9.5%
  • pay this amount to a complying super fund or retirement savings account by the quarterly cut-off date.

You can claim a full tax deduction for super payments you make for employees by the cut-off date. However, if you don’t pay your employees super by the cut off date you won’t be allowed to claim a tax deduction for the expense (even if you pay it one day late) – so its critical to ensure that you pay it on time.

You can use the Superannuation guarantee contributions calculator to work out how much super you must contribute for your eligible workers.

When to pay

You have to pay super guarantee contributions for each eligible worker at least four times a year. Payments must be made by the quarterly cut-off dates:

  Payment cut-off date
1 1 July – 30 September   28 October
2 1 October – 31 December   28 January
3 1 January – 31 March   28 April
4 1 April – 30 June   28 July

What to do if you haven’t met your obligations

If you haven’t met your super obligations as an employer, you have to lodge a Superannuation guarantee charge statement – quarterly and pay a super guarantee charge to the ATO.

You’ll have to do this if you don’t pay:

  • enough super contributions for your worker – this is called a super guarantee shortfall
  • super contributions by the quarterly cut-off date for payment
  • super to your worker’s chosen super fund – this is called a choice liability.

The super guarantee charge is made up of the super guarantee shortfall amounts (including any choice liability), interest at 10% per annum, and an administration fee of $20 per worker per quarter.  Also, your business will lose the tax deduction it would normally get.  Late super contributions and the super guarantee charge are not tax deductible.

Tax Planning Strategy

Super is tax deductible when it is paid.  Therefor you may choose to pay your employees superannuation for the June 2015 quarter before 30 June 2015  (instead of waiting until the due date of 28 July) in order to gain a tax deduction for the expense in the 2015 year. This is a simple way to gain a tax deduction which will help to reduce the amount of tax your business has to pay for the 2015 financial year.

To find out more read the Guide to superannuation for employers or contact us on
07 3512 8888.