Superannuation Guarantee Determination

SGD 2003/6

Superannuation guarantee: how is an advance payment allocated to a particular quarter?

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FOI status:

may be released

1. Under the Superannuation Guarantee (Administration) Act 1992 (SGAA)^[F1] the Commissioner can take into account superannuation contributions made up to 12 months in advance.

2. When an employer has made a payment by way of superannuation, it can be divided into separate contributions for:

•

any quarter which ended within the previous 28 days (subsection 23(6));

•

the current quarter; or

•

any later quarter(s) which start within 12 months of the day on which the payment was made (subsection 23(7)).

3. Once a contribution is applied to one quarter, it cannot be counted toward any other quarter (subsection 23(8)).

4. Unless an employer specifies how to allocate a payment in accordance with the options listed at paragraph 2, the Commissioner will assume that it is a contribution for the previous quarter to the extent necessary to satisfy the minimum superannuation guarantee percentage for that quarter (so long as it was made within 28 days of the end of that quarter). The remainder of the payment would be allocated as a contribution to the current quarter to the extent necessary. Any amount still remaining would be allocated to the next quarter; and so on. If the payment is made later than 28 days after the end of the quarter, then the payment will be allocated to the current quarter or any later quarter(s) which start within 12 months of the day on which the payment was made.

5. For superannuation guarantee purposes, it is not relevant how an award, certified agreement, Australian workplace agreement, or trust deed allocates the payment. Quarterly superannuation guarantee takes effect from 1 July 2003. This means that superannuation contributions must be paid at least quarterly or an employer will be liable for the superannuation guarantee charge.

6. The dates for quarterly superannuation guarantee are as follows:^[F2]

Example 1

7. On 1 July 2003, Brad made a contribution of $10,000 to cover the whole 2003-2004 year. The Commissioner would allocate Brad's advance payment like this:

8. A shortfall of $2,000 will apply for the final quarter. If he makes no further contributions, Brad would have to pay the superannuation guarantee charge for that quarter.

Example 2

9. Towards the end of the 2003-2004 financial year, Hillary is informed by the trustee of her employee's superannuation fund that she had made insufficient contributions during the preceding quarters of the financial year, to a total of $5,000. On 4 July 2004, Hillary makes a payment to the fund in an attempt to cover the arrears for the 2003-2004 year. If insufficient contributions have been made during the first three quarters of the financial year, none of this payment will be allocated to those periods. For superannuation guarantee purposes, the Commissioner would allocate part of the payment to the final quarter in the 2003-2004 year, and the remainder as an advance payment for the first and subsequent quarters in the 2004-2005 year as follows:

10. None of the payment would be allocated to any outstanding amount in a period which finished more than 28 days prior to the payment. The superannuation guarantee charge would be incurred for any earlier quarters during which insufficient superannuation contributions had been made.

Date of Effect

11. This Determination applies from 1 October 2003. It replaces SGD 94/2 which issued on 10 February 1994. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Determination.

Commissioner of Taxation
1 October 2003

Previously released as SGD 94/2.

References

ATO references:
NO 93/4258-3

Subject References:
advance payments
contributions periods

Legislative References:
SGAA 1992 23(6)
SGAA 1992 23(7)
SGAA 1992 23(8)
SGAA 1992 33
SGAA 1992 33(1A)
SGAA 1992 46