Don’t let your employer clients miss any 2019-20 super deductions

A key date is just around the corner for being able to claim a deduction for super payments. With all the COVID-19 updates and new information to absorb, it would not have been surprising to see some “usual” issues bounce under the radar over these EOFY days and weeks.

However one key deadline is imminent, and with it can come some substantial deductions for employers that would be sorely felt by some businesses if they miss out on claiming them for the 2019-20 income year (however see note* below.)

The ATO is reminding employers that super payments are only considered to be paid for the purpose of claiming tax deductions once these have been “received” by the relevant superannuation fund. In other words, if a business is using the Small Business Superannuation Clearing House (SBSCH) to accept super payments for employees, the date the clearing house accepts these payments is not the date it is “paid”, and does not clear the way for making a claim.

To ensure a deduction can be claimed, your employer clients should be advised that allowance for processing needs to be made so that super payments are received by the fund before the end of the financial year. Advice from the ATO is that the key date for payments to be made to the SBSCH is 23 June (Tuesday of next week).

Clients may also need reminding that super fund details need to be current, and to check with employees if they have had notification of any changes to their fund (and if there have been any, to give these details to the employer). Just in case, the SBSCH helpline is 1300 660 048.

  • * Note: In a just-released announcement, the Commissioner is allowing some wriggle room in regard to claiming deductions for super contributions over the transition from the 2019-20 to 2020-21 income years. According to PCG 2020/6, Timing of income tax deductions for superannuation contributions made through the Small Business Superannuation Clearing House – ATO compliance approach, the Commissioner will not apply compliance resources to determine which income year employers are entitled to claim income tax deductions for super contributions made through the SBSCH provided your client makes the payment to the SBSCH before close of business on the last business day on or before 30 June.

Quick Tax video: SBSCH – tax deductions

If you are an employer using the SSBSCH to make superannuation contributions on behalf of your employees, there is a tax issue of which you need to be aware. In this video, John Jeffreys, Tax Counsel, explains the issue that relates to obtaining a tax deduction for a superannuation contribution to the SSBSCH. There is an important date approaching if you want to be certain that you can claim a tax deduction for the contributions.

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