This explains the process for how to generate and remit payments in relation to claims for dividends relating to the unpaid super guarantee contributions (SGC).
The timing of the superannuation dividend will determine the recipient of the dividend payment. If the dividend is paid in the first 3 months, then the funds are remitted to each employers' superannuation fund. If the payment is delayed then the funds are remitted to the ATO.
Claims should be entered as part of the employees' (preferred) claims for SGC made by employers (this tracks each employee's claims as a separate component) and, when the distribution is made as part of an employee distribution, creates an STP batch for submission.
It is possible, although not recommended, to enter the super liability as one lump sum as a claim by the ATO. In this case, you may add the ATO to Priority Creditors (Employee & SGC) by using "Add Creditor". As the ATO are not an employee no STP submission will be available. The employee would be notified of the distribution via correspondence from the appointee.
The ATO applies an additional administration fee and interest charge to the SGC payable.
From v2022.05 Click here for an article on how to record this fee and charge in insol6 and pay to the ATO.
Pre v2022.05 - To account for the administration fee and interest you may create a separate account "Superannuation - Admin and interest fee (ATO)" as a "cost of realisation". Alternatively you may add the fee to the ATO's claim for superannuation, depending upon how you see the priority of the debt.
At the time of writing, the ATO provides a spreadsheet download that the insolvency practitioner needs to complete detailing the employee's liability. It is up to the ATO to determine the amount of super attributed to each employee, which is done via the spreadsheet.
When a super dividend is "paid" from the software, there isn't any cash paid out. Instead, a liability is created and then funds are remitted appropriately, either to the ATO or to the superfund. The superfund monies need not be remitted until the end of each quarter, but, it may be your usual practice to remit funds immediately.
Since dividends for employees are remitted to either the employee's super fund or to the ATO and the remittance may be made on a different date to the actual dividend, the dividend payments are created separately.
The payment of the dividend and remittance of the liability is a two-step process:
- When creating a dividend with superannuation claims a liability is created to one of the 'Superannuation Withheld' accounts.
These are liability accounts which will have negative balances.
- A payment is then entered to remit the liability. You can remit superannuation using either
(a) Pay Super Amounts withheld function or you can use Make Payment. Steps to remitting using this function can be found in the article Generating Remittance amounts for payment of super withheld
(b) Make Payment. If using make payment ensure your payment is made out of the correct liability account.
The payment is as follows using either Super Control (Non-Trading): Super Paid (Received) or Super Control (Trading): Super Paid (Received) account
1. It is important to make payments out of the correct liability account as this will determine where the payment appears in ASIC Form 5602/5603. As ASIC Form 5602/5603 uses a cash-based reporting method, it must pick up the payment of the liability accrual rather than the initial record of the expense.
2. The Superannuation Withheld (Other) account is for payments withheld on behalf of employees during the administration trading period.
3. The Superannuation Withheld (Preferred Dividend) account is for superannuation in relation to employee dividends.
4. The Superannuation Withheld (Unsecured Dividend) account is for superannuation where an excluded employee receives an unsecured dividend in relation to superannuation.
5. There is no need to allocate the remittance of superannuation payments against individual employees.
6. SGC super deductions are reported on STP.