The lead-up to the End of Financial Year is always a busy one but even more so when the universe throws in a leap year causing 30 June 2024 to fall on a Sunday making the timing of contributions even more crucial this year.
This is important because superannuation contributions are only considered paid on the date it is received by the SMSF and not the date in which it is made. This can be difficult especially with superannuation guarantee contributions which the employer pays through a “clearing house”.
For those employers using the ATO’s free Small Business Superannuation Clearing House (SBSCH) service (ie. for employers with less than 20 staff or annual turnover of less than $10m), there is some leeway as explained in the ATO’s PCG 2020/6. That is, if the employer makes the contribution to the SBSCH by close of business on 30 June it is seen to be received by the SMSF in the same income year provided:
- the payment was subsequently accepted by the fund; and
- all the required information was furnished to the SBSCH at the time of making the payment.
So, for 2024, the close of business will fall on Friday 28 June.
However, it’s important to note that the above relief only applies to contributions made via SBSCH and not commercial clearing houses like QuickSuper, ADF Super etc. As such, if you would like your June 2024 superannuation guarantee contributions to be counted towards your 2024 concessional contributions cap, then it would be prudent to speak to your employer about this sooner rather than later.
Similarly, the timing of contributions is critical if you are managing your contributions caps as you will need to ensure you’ve allowed enough time for last minute contributions. Depending on the method of the contribution one must ensure:
- EFTs are credited to the fund’s bank account on or before 28 June 2024 (do allow for extra days if transferring between different banks which can take up to 3 working days).
- Cheques are received by the trustee on or before 28 June 2024.
- Off market transfer forms are completed, signed and dated on or before 28 June 2024 where contributing via the transfer of listed shares or managed funds.
Changes to SMSF contributions from employers using the Small Business Clearing House (SBSCH) from 15 March 2024
Employers with less than 20 staff or annual turnover of less than $10m using the ATO’s free Small Business Superannuation Clearing House (SBSCH) service are now subject to an extra verification step for transactions from 15 March 2024.
This new validation process requires employers using SBSCH to ensure an exact match between the SMSF bank account details recorded by the ATO and their employees’ SMSF bank account details. That is, both the BSB and account number for the SMSF as registered under the ATO’s superannuation account are the same as what the employer has.
If the details don’t match then SBSCH cannot process the superannuation contribution which may result in employers breaching their reporting obligations risking superannuation guarantee shortfalls and/or penalties, as well as members not having their contributions counted towards the correct financial year for contribution caps purposes.
As always, it is important running up to year end to ensure all superannuation contribution related matters are attended to well before 30 June. Don’t let last minute delays make your contributions late and upset your contribution caps. If you have any queries in relation to the above don’t hesitate to contact your client manager.
Author: Anna Wong – Senior SMSF Manager at Premier SMSF Solutions
*Correct as of 23 April 2024
*Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.
