Did You Know…?
Discussions to be had on “Superannuation Pay Day” System
In the 2023/24 Federal Budget, it was announced that employers will be required to pay their employees’ superannuation guarantee (SG) entitlements on the same day that they pay their salary and wages, with the proposal of this measure taking effect on 1 July 2026.
The treasury has released a consultation paper to relevant stakeholders to discuss the impacts and the implementation of the new SG system. Currently their concern with the current system where super guarantee is paid on a quarterly basis raises the issues of when employers forget to pay their super obligations on time and many are left unpaid and causes difficulties when an employer goes into liquidation with outstanding SG obligations.
The proposed changes will encourage employers to pay their super obligations much closer to the time when the payment of wages is made thereby eliminating the issue of outstanding SG obligations. Under the new scheme, there are two methods up for discussion, one being the employer payment model and the due date model. Under the employment model the requirement would be on the employer to make the SG payment on that the same the salary and wages are paid. In competition, the due date model is the model is like the current system only that the payment must be made within a certain number of days after the payment of salary and wages are made.
The debate is determining what constitutes “pay day” and whether the ATO with have the IT capabilities to ensure accurate reporting and implementation methods to avoid the current issues. More information is to come on the result of this consultation paper, and we will keep you up to date on any changes made to the current SG obligation requirements.
If you think you have missed your SG obligation deadline or are unsure, please contact us and we can assist you further.
