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Bring Forward Super Guarantee Contributions and save tax!

ABA Tech Talk

Bring Forward Super Guarantee Contributions and save tax!

The compulsory 9.5% Superannuation Guarantee (SG) is payable by employers 28 days after the end of each quarter. For those of you who handle client superannuation, if clients have the cash on hand they may instruct you to, or they may wish to consider, bringing forward the payment of the June quarter amount to before 1 July (normally due 28 July).

Doing so will bring forward the deduction to this financial year (2018/2019).

Be aware that deductions can only be claimed in the year that the super fund receives the payment (as distinct from when you made the payment).

For electronic payments, for the purposes of claiming a deduction, the contribution is deemed to be made when the funds are credited to the superannuation provider’s account (usually a maximum of a few days). Accordingly, in order for the employer to be able to claim their deduction this financial year, it is recommended that you bring payments forward to account for this (rather than leave it until the final few days).

If you are paying to a Superannuation Clearing House, you should allow more time for your contributions to clear. The ATO has specified no later than 21 June.

You should also be mindful that in pursuing the above strategy, it may cause some employees to exceed their annual $25,000 concessional contribution cap. The client may not want to bring forward the contributions in these instances.

18 Jun 2019
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