A common issue arising is business owners not paying the staff super on time. This can have a significant impact on the tax for the year – as Super is only deductible if PAID ON TIME. If it’s paid one day late the tax deduction is lost. Because of this, super could be considered more important than paying your suppliers on time (as the deduction isn’t lost if the supplier is paid late).
When is Super Due?
Super is due 28 days after the end of quarter:
Jul – Sep quarter due 28 October
Oct – Dec quarter due 28 January
Jan – Mar quarter due 28 April
Apr – Jun quarter due 28 July
How Much Can I Lose by Paying Super Late?
It depends on how much super is due and your tax structure. But here’s an example:
Company A had a profit of $100,000 in 2015. The tax on this would typically be $30,000 (flat 30%). However during the year Company A paid their $45,000 staff super late. As this was paid late, Company A lost this tax deduction and therefore now has to pay 30% tax on $145,000.
This amounts to a $43,500 tax bill – an increase of $13,500 (or 30% of $45,000). So purely by paying the super late it’s cost the business $13,500 – which is a massive deal to this business.