The Australian Taxation Office (ATO) has released a Practical Compliance Guideline in respect of which income year an employer can claim a tax deduction for superannuation guarantee (SG) contributions paid through the Small Business Superannuation Clearing House (SBSCH) to an employee’s nominated superannuation fund.

Ordinarily, an income tax deduction is available for super contributions made by an employer to a complying superannuation fund in the income year that it is made. Super contributions are made when the payment is received by the complying superannuation fund. The ATO acknowledges that there may be a period of time between when super contributions are paid by the employer to the SBSCH and when it is actually received by the superannuation fund.

When super payments are made on the last business day on or before 30 June, the PCG sets out that the SG contribution is tax-deductible in the income year the payment is made to the SBSCH. The employer is not required to check with the employee’s superannuation fund to confirm in which income year the contributions were received, prior to claiming a tax deduction.

This compliance approach will only apply to SG contributions where all the relevant information has been provided to the SBSCH to enable it to process the payment, and that the payment has not been dishonoured or returned.

The Practical Compliance Guide applies both before and after its date of issue.

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