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  • Examples of calculating the super guarantee charge

    Meeting your superannuation guarantee payments obligations

    You have met your superannuation guarantee obligations for your employee if you made all superannuation guarantee payments:

    • for the quarter
    • by the cut-off date
    • that meet your choice obligations
    • that meet the minimum contribution requirements of 9%.

    Payments will only meet the superannuation guarantee obligations if they are paid to:

    • a complying superannuation fund
    • retirement saving account provider, or
    • the approved clearing house.

    If you have not met all the SGC requirements, see the following examples for what to do next.

    Examples of the employee's calculation worksheet

    These examples use the Employee calculation worksheet (NAT 72392) to work out the following:

    • super guarantee shortfall
    • choice liability
    • late payment offset.

    The step references in the examples below refer to the steps in the worksheet – for example, 'Step 1 (A): Employee quarterly information' relates to step 1 (A) in the worksheet.

    Example 1 – You have not paid any super for your employee for the quarter

    Luke Kite is an employee of Tree Pty Ltd during the quarter ended 31 December 2009. Tree Pty Ltd has not paid any super contributions for Luke for the quarter. His shortfall is worked out on his total salary or wages for the quarter.

    Step 1 (A): Employee quarterly information

    Q4 What is the employee's total salary or wages for the quarter, limited to the maximum contribution base?

    As Tree Pty Ltd did not pay any super contributions for Luke, this is the only information they must use to work out his super guarantee shortfall.

    Label D $11,800

    Step 1 (B): Simple calculation of employee super guarantee shortfall

    Work out the employee's super guarantee shortfall amount (excluding choice).

    Copy this amount to question 15 (label H) on the statement.

    There is no choice liability for this employee. Write '0' at question 17 (label I) on the statement.

    Copy the amount from question 15 (label H) to question 18 (label J) on the statement.

    The super guarantee contribution rate is 9.5% of the employee's earnings base. You must use ordinary times earnings to calculate the minimum super guarantee contribution for each eligible employee.

    End of example

     

    Example 2 – You have not paid any super before the cut-off date but you paid some late

    Karen Atkins is an employee of Cost Pty Ltd during the quarter ended 30 September 2009.

    Cost Pty Ltd paid a $792 super guarantee contribution to Karen's nominated fund on 1 November 2009, after the cut-off date for the quarter. In this example, Cost Pty Ltd has chosen to have the late payment applied as the maximum allowable offset.

    N/A – not applicable – means this example does not require this information.

    Step 1 (A): Employee quarterly information

    Q1 How much super have you paid for this employee for the quarter (include on time and late payments)?

    Label A $792

    Q2 How much super did you pay by the cut-off date for this employee for the quarter?

    Label B $0.00

    Q3 How much super did you pay by the cut-off date to the employee's chosen fund for the quarter?

    Label C $0.00

    Do not include any contributions you made to the employee's chosen fund where you charged your employee a direct cost for making contributions to the fund.

    Make sure you include any contributions you made within two months of your employee giving you details of their chosen fund, even if you paid them to a fund other than the employee's chosen fund.

    Q4 What is the employee's total salary or wages for the quarter, limited to the maximum contribution base?

    Label D $12,980

    Q5 What is the employee's earnings base for the quarter, limited to the maximum contribution base?

    Label E $ indicated with N/A

    Step 1 (B): Simple calculation of employee super guarantee shortfall

    As Cost Pty Ltd did not pay any super contributions for Karen before the cut-off date, the super guarantee shortfall is 9.5% of Karen's total salary and wages (D). There is no super choice liability for Karen so they do not need to complete step 2.

    Step 2: Employee preparation calculations

    Since B is zero, the percentage of super guarantee contribution paid by the cut-off date (G) is 0%. Also B = C, so go on to step 3.

    Step 3: Employee super guarantee shortfall calculations

    Work out the employee's super guarantee shortfall (excluding choice).

    Label D $12,980 multiplied by (9 minus lable G) 9 divided by 100 equals label H $1168.20

    Since B = C there is no choice liability for this employee, I is zero

    equals Label I $0

    Employee's subtotal (H + I)

    Label J $1168.20

    Step 4: Do you want to claim a late payment offset for this employee?

    Q1 Have you paid and had accepted any money into your employee's fund after the cut-off date for the quarter?

    Yes No box, yes selected

    Q2 Has an original SGC assessment been made by the ATO for this period?

    Yes no box, No selected go to question 4.

    Q3 Was the late payment for this employee received by the fund before the original SGC assessment was made for this period?

    Yes No you cannot make a late payment election. Go to step 6.

    Q4 Do you want to make a late payment election for this employee?

    yes no box Yes selected

    Step 5: Employee late payment offset election amount

    What is the total of late payments?

    Label A $792 minus label B $0 equals $792

    Cost Pty Ltd has chosen to have the late payment applied as the maximum allowable offset available. The late payment offset election amount for Karen is $792.

    The amount at question 20 (label N) will not offset an amount greater than the employee's subtotal from step 3 (label J).

    Write this amount at question 20 (label N) of the statement for Karen.

    Employee's late payment offset election amount

    Label S $792

    Step 6: Transferring employee information

    Transfer the amounts at labels H, I, J and N (if needed) to section C on the statement for this employee. If label I equals 0 for this employee, answer 'Yes' at question 16 of the statement, otherwise answer 'No'.

    You will need to include your answers from step 4 at question 19 of the statement.

    End of example

     

    Example 3 – You paid some super to the wrong fund before the cut-off date and some super was paid late

    Sali Jones started employment with Cost Pty Ltd on 3 October 2009 and was employed for the rest of the quarter, ending 31 December 2009.

    Cost Pty Ltd paid a $900 super guarantee contribution on 10 January 2010 (before the cut-off date). Cost Pty Ltd paid a further $450 super guarantee contribution on 12 February 2010. In this example, Cost Pty Ltd elected to have some of the late contribution applied as an offset.

    Cost Pty Ltd offered choice of super fund to Sali and he chose Neat Superannuation Fund. However, contributions were paid to Prime Superannuation Fund (the employer's default fund) more than two months after Cost Pty Ltd received Sali's nomination. Therefore, Cost Pty Ltd did not meet its choice obligations and has to pay a choice liability for Sali.

    Step 1 (A): Employee quarterly information

    Q1 How much super have you paid for this employee for the quarter (include on time and late payments)?

    Label A $1350

    Q2 How much super did you pay by the cut-off date for this employee for the quarter?

    Label B $900

    Q3 How much super did you pay by the cut-off date to the employee's chosen fund for the quarter?

    Label C $0

    Do not include any contributions you made to the employee's chosen fund where you charged your employee a direct cost for making contributions to the fund.

    Make sure you include any contributions you made within two months of your employee giving you details of their chosen fund, even if you paid them to a fund other than the employee's chosen fund.

    Q4 What is the employee's total salary or wages for the quarter, limited to the maximum contribution base?

    Label D $17,300

    Q5 What is the employee's earnings base for the quarter, limited to the maximum contribution base?

    Label E $15,000

    Step 1 (B): Simple calculation of employee super guarantee shortfall

    For this example step 1 (B) is not required. Go to step 2.

    Step 2: Employee preparation calculations

    Work out the percentage of super guarantee contribution paid by the cut-off date.

    Label B $900 multiply by 100 divide by label E $15,000 equals label G 6 per cent

    Since B does not equal C Cost Pty Ltd has a choice liability for Sali.

    Work out the percentage of super guarantee contribution paid to the employee's nominated fund by the cut-off date.

    Label C $0 multiply 100 divide by label E $15,000 equals label Y 0 per cent

    Work out the notional quarterly shortfall.

    Label D $17,300 divide 100 multiply by (9 minus label Y) 9 equals label Z $1557.00

    Step 3: Employee super guarantee shortfall calculations

    Work out the employee's super guarantee shortfall (excluding choice).

    Label D $17,300 divide by 100 multiply by (9 minus label G) 3 equals label H $519.00

    Work out the choice liability for this employee.

    0.25 multiply (label Z minus label H) $1038.00 equals label I $259.50

    Choice liability is limited to $500 per notice period per employee, so label I cannot be greater than $500.

    Employee's subtotal (H + I)

    Label J $778.50

    Step 4: Do you want to claim a late payment offset for this employee?

    Q1Have you paid and had accepted any money into your employee's fund after the cut-off date for the quarter?

    Yes marked with X

    Q2 Has an original SCG assessment been made by the ATO for this period?

    No go to question 4.

    Q3 Was the late payment for this employee received by the fund before the original SGC assessment was made for this period?

    Yes No you cannot make a late payment election. Go to step 6.

    Q4 Do you want to make a late payment election for this employee?

    Yes

    Step 5: Employee late payment offset election amount

    What is the total of late payments?

    Label A $1350 minus label B $900 equals $450.00

    Cost Pty Ltd has chosen to elect $300 of the late payment of $450 to be applied as an offset. The late payment election amount for Sali is $300.

    The amount at question 20 (label N) cannot be greater than the employee's subtotal amount from step 3 (label J).

    Write this amount at question 20 (label N) on the statement for Sali.

    Employee's late payment offset election amount

    Label S $300.00

    Step 6: Transferring employee information

    Transfer the amounts at labels H, I, J and N to section C on the statement for this employee. If label I equals 0 for this employee, answer 'Yes' at question 16 of the statement, otherwise answer 'No'.

    You will also need to include your answers from step 4 at question 19 of the statement.

    End of example

    You paid some super to the correct fund before the cut-off date and also paid some late

    Example 4 – You paid some super to the correct fund before the cut-off date and also paid some late

    Alys Smith started employment with Cost Pty Ltd on 3 October 2009 and was employed for the rest of the quarter ended 31 December 2009.

    Cost Pty Ltd paid a $900 super guarantee contribution to Neat Superannuation Fund (Alys's nominated fund) on 10 January 2010 (before the cut-off date). Cost Pty Ltd also paid $600 super guarantee contribution to Alys's nominated fund on 12 February 2010 (after the cut-off date). In this example, Cost Pty Ltd has chosen to have the late contribution applied as the maximum allowable offset. Cost Pty Ltd lodged the statement on 28 February 2010.

    Step 1 (A): Employee quarterly information

    Q1 How much super have you paid for this employee for the quarter (include on time and late payments)?

    Label A $1500

    Q2 How much super did you pay by the cut-off date for this employee for the quarter?

    Label B $900

    Q3 How much super did you pay by the cut-off date to the employee's chosen fund for the quarter?

    Label C $900

    Do not include any contributions made to the employee's chosen fund where you charged your employee a direct cost for making contributions to the fund.

    Make sure you include contributions you made within two months of your employee giving you details of their chosen fund, even if you paid them to a fund other than the employee's chosen fund.

    Q4 What is the employee's total salary or wages for the quarter, limited to the maximum contribution base?

    Label D $17,300

    Q5 What is the employee's earnings base for the quarter, limited to the maximum contribution base?

    Label E $15,000

    Step 1 (B): Simple calculation of employee super guarantee shortfall

    For this example step 1 (B) is not required. Go to step 2.

    Step 2: Employee preparation calculations

    Work out the percentage of super guarantee contribution paid by the cut-off date.

    Label B $900 multiply by 100 divided by label E $15,000 equals label G 6 per cent

    Since B = C go to step 3.

    Step 3: Employee super guarantee shortfall calculations

    Work out the employee's super guarantee shortfall (excluding choice)

    Label D $17,300 divide by 100 multiply (9 minus label G) 3 quals label H $519.00

    Since B = C there is no choice liability for Alys, I is zero.

    equals label I $0.00

    Employee's subtotal (H + I)

    Label J $519.00

    Step 4: Do you want to claim a late payment offset for this employee?

    Q1 Have you paid and had accepted any contribution into your employee's fund after the cut-off date for the quarter?

    Yes

    Q2 Has an original SGC assessment been made by the ATO for this period?

    No go to question 4.

    Q3 Was the late payment for this employee received by the fund before the original SGC assessment was made for this period?

    Yes No you cannot make a late payment election. Go to step 6.

    Q4 Do you want to make a late payment election for this employee?

    Yes

    Cost Pty Ltd has elected to have the late contribution applied as an offset.

    Step 5: Employee late payment offset election amount

    What is the total of late payments?

    Label A $1500 minus label B $900 equals $600.00

    Cost Pty Ltd has decided to maximise the offset available. Therefore, the late payment election amount for Alys is $600.00.

    In this example the late payment offset election amount of $600 is greater than the employee's subtotal of $519 from step 3 (label J). You will need to work out the nominal interest for this employee.

    Refer to the Nominal interest calculation worksheet (NAT 72393).

    Nominal interest =

    Label L1 0.25 plus label L2 0.16 plus label L3 0 equals 0.41 multiply by 0.1 multiply by label J $519.00 equals label K# $21.28

    Work out the employee maximum offset election amount.

    Label J $519.00 plus label K $21.28 equals label R $540.28

    # K is the amount of nominal interest calculated for this employee on the Nominal interest calculation worksheet (NAT 72393).

    The late payment offset amount allowed cannot be greater than the employee's maximum offset amount at R above.

    Write this amount at question 20 (label N) of the statement for Alys.

    Enter the lesser amount at N below.

    Employee's late payment offset election amount.

    Label S $540.28

    Since Cost Pty Ltd is choosing to offset the maximum allowed, they would enter $540.28 at question 21 (label N) of the statement. The remaining $59.72 of the $600 late payment may be used by Cost Pty Ltd as a prepayment for contributions for Alys for a later quarter or as a late payment for some other period they have a super guarantee charge for.

    Step 6: Transferring employee information

    Transfer the amounts at labels H, I, J and N to section C of the statement for this employee. If label I equals 0 for this employee, answer 'Yes' at question 16 of the statement, otherwise answer 'No'.

    You will need to include your answers from step 4 at question 19 of the statement.

    End of example

     

    Example 5 – You paid some super before the cut-off date but at least some contributions were paid to the wrong fund

    Mitchell Maple started employment with Cost Pty Ltd on 3 October 2009 and was employed for the rest of the quarter ended 31 December 2009.

    Cost Pty Ltd offered a choice of super fund to Mitchell and he chose Neat Superannuation Fund. Cost Pty Ltd paid $900 in super contributions to Prime Superannuation Fund (the employer's default fund) before the cut-off date, but more than two months after Cost Pty Ltd received Mitchell's nomination. Cost Pty Ltd did not meet its super choice obligation and has a choice liability.

    Step 1 (A): Employee quarterly information

    Q1 How much super have you paid for this employee for the quarter (include on time and late payments)?

    Label A $900

    Q2 How much super did you pay by the cut-off date for this employee for the quarter?

    Label B $900

    Q3 How much super did you pay by the cut-off date to the employee's chosen fund for the quarter?

    Label C $0

    Do not include any contributions made to the employee's chosen fund where you charged your employee a direct cost for making contributions to the fund.

    Make sure you include any contributions you made within two months of your employee giving you details of their chosen fund, even if you paid them to a fund other than the employee's chosen fund.

    Q4 What is the employee's total salary or wages for the quarter, limited to the maximum contribution base?

    Label D $17,300

    Q5 What is the employee's earnings base for the quarter, limited to the maximum contribution base?

    Label E $15,000

    Step 1 (B): Simple calculation of employee super guarantee shortfall

    For this example step 1 (B) is not required. Go to step 2.

    Step 2: Employee preparation calculations

    Work out the percentage of super guarantee contribution paid by the cut-off date.

    Label B $900 multiply by 100 divided by label E $15,000 equals label G 6 per cent

    Work out the percentage of super guarantee contribution paid to the employee's nominated fund by the cut-off date.

    Laabel C $0 multiply by 100 divided by label E $15,000 equals label Y 0 per cent

    Work out the notional quarterly shortfall.

    Laabel D $17,300 divided by 100 multiply by (9 minus label Y) 9 equals label Z $1557.00

    Step 3: Employee super guarantee shortfall calculations

    Work out the employee's super guarantee shortfall (excluding choice).

    Laabel D $17,300 divided by 100 multiply by (9 minus label G) 3 equals label H 519.00

    Work out the choice liability for this employee.

    0.25 multiply

    (Label Z minus label H) $1038.00 equals Label I $259.50

    Choice liability is limited to $500 per notice period per employee, so label I cannot be greater than $500.

    Employee's subtotal (H + I)

    Label J $778.50

    Steps 4 and 5: are not relevant to this example since there were no late payments

    Step 6: Transferring employee information

    Transfer the amounts at H, I, and J to section C of the statement for this employee. If label I equals 0 for this employee, answer 'Yes' at question 16 of the statement, otherwise answer 'No'.

    End of example

     

    Example 6 – You paid the correct amount of super on time but not to the correct fund

    Alisa Smith started employment with Cost Pty Ltd on 3 October 2009 and was employed for the rest of the quarter ended 31 December 2009.

    Cost Pty Ltd offered choice of super fund to Alisa and she nominated Neat Superannuation Fund. Cost Pty Ltd paid Alisa's super contributions of $1,350 to Prime Superannuation fund (the employer's default fund) by the cut-off date, which was more than two months after she provided her nomination. Cost Pty Ltd did not meet its super choice obligation and have a choice liability.

    Step 1 (A): Employee quarterly information

    Q1 How much super have you paid for this employee for the quarter (include on time and late payments)?

    Label A $1350

    Q2 How much super did you pay by the cut-off date for this employee for the quarter?

    Label B $1350

    Q3 How much super did you pay by the cut-off date to the employee's chosen fund for the quarter?

    Label C $0

    Do not include any contributions made to the employee's chosen fund where you charged your employee a direct cost for making contributions to the fund.

    Make sure you include any contributions you made within two months of your employee giving you details of their chosen fund, even if you paid them to a fund other than the employee's chosen fund.

    Q4 What is the employee's total salary or wages for the quarter, limited to the maximum contribution base?

    Label D $17,300

    Q5 What is the employee's earnings base for the quarter, limited to the maximum contribution base?

    Label E $15,000

    Step 1 (B): Simple calculation of employee super guarantee shortfall

    For this example step 1 (B) is not required. Go to step 2.

    Step 2: Employee preparation calculations

    Work out the percentage of super guarantee contribution paid by the cut-off date.

    Label B $1350 multiply by 100 divided by label E $15,000 equals label G 9 per cent

    Work out the percentage of super guarantee contribution paid to the employee's nominated fund by the cut-off date.

    Label C $0 multiply by 100 divided by label E $15,000 equals label Y 0 per cent

    Work out the notional quarterly shortfall.

    Label D $17,300 divided by 100 multiply

    (9 minus label Y) 9 equals label Z $1557.00

    Step 3: Employee super guarantee shortfall calculations

    Work out the employee's super guarantee shortfall (excluding choice).

    Label D $17,300 divided by 100 multiply by (9 minus label G) 0 equals label H $0

    Work out the choice liability for this employee.

    0.25 multiply

    (Label Z minus label H) $1557.00 equals label I $389.25

    Choice liability is limited to $500 per notice period per employee, so label I cannot be greater than $500.

    Employee's subtotal (H + I)

    Label J $389.25

    Steps 4 and 5: are not relevant to this example since there were no late payments

    Step 6: Transferring employee information

    Transfer the amounts at H, I and J to section C of the statement for this employee. If label I equals 0 for this employee, answer 'Yes' at question 16 of the statement, otherwise answer 'No'.

    End of example

     

    Example 7 – You paid insufficient super to the correct fund before the cut-off date

    Bob Peters started employment with Cost Pty Ltd on 3 October 2009 and was employed for the rest of the quarter ended 31 December 2009.

    Cost Pty Ltd offered a choice of super fund to Bob and he chose Neat Superannuation Fund.

    Bob was entitled to $1,350 super contributions but Cost Pty Ltd only paid $900 to Neat Superannuation Fund (Bob's nominated fund) in December 2009 (before the cut-off date).

    Step 1 (A): Employee quarterly information

    Q1 How much super have you paid for this employee for the quarter (include on time and late payments)?

    Label A $900

    Q2 How much super did you pay by the cut-off date for this employee for the quarter?

    Label B $900

    Q3 How much super did you pay by the cut-off date to the employee's chosen fund for the quarter?

    Label C $900

    Do not include any contributions made to the employee's chosen fund where you charged your employee a direct cost for making contributions to the fund.

    Make sure you include any contributions you made within two months of your employee giving you details of their chosen fund, even if you paid them to a fund other than the employee's chosen fund

    Q4 What is the employee's total salary or wages for the quarter, limited to the maximum contribution base?

    Label D $17,300

    Q5 What is the employee's earnings base for the quarter, limited to the maximum contribution base?

    Label E $15,000

    Step 1 (B): Simple calculation of employee super guarantee shortfall

    For this example step 1 (B) is not required. Go to step 2.

    Step 2: Employee preparation calculations

    Work out the percentage of super guarantee contribution paid by the cut-off date.

    Label B $900 multiply 100 divided by label E $15,000 equals label G 6 per cent

    Since B = C go to step 3.

    Step 3: Employee super guarantee shortfall calculations

    Work out the employee's super guarantee shortfall (excluding choice).

    Label D $17,300 divided by 100 multiply by (9 minus label G) 3 equals label H $519.00

    Since B = C there is no choice liability for this employee, I is zero.

    Steps 4 and 5: are not relevant to this example since there were no late payments

    Step 6: Transferring employee information

    Transfer the amount at H to question 15 and question 18 of the statement. If label I equals 0 for this employee, answer 'Yes' at question 16 of the statement, otherwise answer 'No'.

    End of example
    Last modified: 11 Oct 2018QC 17278