Unpaid Superannuation for Directors

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Unpaid Superannuation for Directors

Directors go under the same rules as any other employee – if they earn more than $450 per month then they are required to pay 9.5% Superannuation Guarantee Charge (SGC) on their wages.

There is a misconception out there that owners don’t have to pay this on their own wages – it’s simply not true if you operate through a company or trust.

This means that exactly the same rules apply for SGC relating to payments/non-payment as any other employee:

  1. It’s due by 28th of the month following the quarter ie 28 July for June 30 Quarter
  2. If it’s not paid by this date then a Super Guarantee Charge Statement needs to be filled out. This calculates an admin fee, SGC Payable and interest Payable.
  3. Any amounts paid after the due date are non-deductible
  4. Any amounts paid within 28 days of the due date can be offset against the Super Guarantee Charge but the form still needs to be lodged and the payment shown.

As an aside, it’s not possible for Sole Traders or Partners in Partnerships to include themselves in payroll and withhold tax for themselves this way. It’s a shame though as it may help those who always forget to save for their taxes.

Photo credit: George Grinsted via VisualHunt / CC BY-SA