ATO Payments

Amounts Payable to the ATO by your SMSF

SMSFs are required to prepare and lodge an Income Tax Return, resulting in either an Income Tax Payable or Refundable. However, in addition to the Income Tax liability, the SMSF may also incur other ATO payments or taxes. Therefore, it is important for the Trustees to be aware of the common ATO payments and their relevant due dates.

Income Tax

When a complying SMSF generates income, it is generally taxed at a concessional rate of 15%. The tax rates vary depending on whether any member in your SMSF has commenced a pension. A summary of SMSFs’ tax rates can be found here.

Income Tax Notification

ESUPERFUND will attend to the preparation and lodgement of your SMSF’s Income Tax Return annually. This service is covered under our annual fee. Your SMSF’s net income tax amount (tax liability payable or tax refund receivable) will be calculated and detailed in the Income Tax Notification.

The Income Tax Notification is provided to you as part of the SMSF’s Annual Compliance Documentation and can be downloaded via the Client Portal in the ‘Annual Reports’ section. The Income Tax Notification will also detail the relevant lodgement and payment due date.

It is important that the SMSF’s tax return is lodged and any tax liability paid by the due date, failing which the ATO may issue overdue payment notices and penalties. Any overdue payment notices received by our office will be forwarded to you via the Client Portal Inbox.

SMSF Supervisory Levy

The ATO charges an annual supervisory levy and the levy is payable by all SMSFs upon lodgement of the Annual Tax Return with the ATO. This levy applies to all SMSFs and not just SMSFs administered by ESUPERFUND. Your SMSF’s supervisory levy payment arrangement depends on whether your SMSF is a continuing fund or winding-up fund and newly or not newly registered. For further details regarding supervisory levy payment arrangements, please refer to the ATO’s website.

The supervisory levy amount is payable directly to the ATO and will be included on the Income Tax Notification as part of the SMSF’s net income tax payable or refundable amount.

In the case that your SMSF is not required to lodge a Tax Return in the first year, that is, if the SMSF does not have any transaction in the first year it is setup, then the Supervisory Levy is not required to be paid for that year. You may visit our website for further information regarding Return Not Necessary (RNN).

Goods and Services Tax (GST)

ESUPERFUND automatically registers your SMSF for GST as part of the establishment process and attends to the preparation of the SMSF’s annual GST Return, at no additional cost. An Annual GST Statement, detailing the net GST payable or refundable amount, is included in the Annual Reports provided to you. Any GST payable amount is also detailed on the Income Tax Notification.

PAYG Instalments

PAYG instalment is an estimate made by the Australian Taxation Office based on your Superfund’s previous years’ assessment and is essentially a prepayment of your SMSF‘s tax liability for the current Financial Year. The ATO will also determine how frequently your SMSF is required to pay these instalment amounts.

Varying PAYG Instalment Amount

As the PAYG instalment amount is calculated based on your SMSF’s most recently lodged tax return, this amount may not best reflect the current circumstances of your SMSF. Accordingly, you may choose to vary the PAYG instalment amount down if you believe that the amount provided by the ATO overestimated your SMSF’s actual income tax liability.

Example:

Barney established his SMSF a few years ago and the most recent tax return lodged is for 2023 Financial Year which had a notional tax of $5,200. When the ATO issues the 2024 Annual PAYG, it will estimate the 2024 PAYG instalment amount based on the notional tax from the 2023 Tax Return.

The ATO therefore requires Barney to pay $5,200 PAYG instalment for the 2024 Financial Year but Barney does not agree that this amount accurately reflects his SMSF’s situation because his SMSF incurred significant investment losses in 2024. Barney estimates that his SMSF’s actual income tax liability for the 2024 Financial Year is only $1,000 and therefore decides to vary the PAYG instalment amount down from $5,200 to $1,000.

It is important that you reliably estimate the tax payable on your SMSF’s income when you vary PAYG Instalment amount down.

We caution that you may be liable to the general interest charge (GIC) if you vary your PAYG instalment amount down and end up paying less than 85% of the actual tax payable on your Fund’s income. If you are not sure, it is best to not vary your instalments. Any overpaid instalments will be refunded upon lodgement of the Tax Return.

Please note that ESUPERFUND cannot provide any advice on the estimation of the income tax liability.

Lodging and Paying PAYG Instalments

When the ATO issues Activity Statements requiring your SMSF to lodge and pay PAYG instalments, ESUPERFUND will contact you via the Client Portal Inbox and provide you with the payment details, applicable due dates and instructions on how to vary the PAYG instalment amount should you wish to do so. It should be noted that any variation request can only be lodged with the ATO prior to the due date.

The lodgement and payment due dates of the PAYG instalment varies according to the frequency with which the SMSF is required to pay the PAYG instalments. The PAYG frequency, that is, whether your SMSF is required to pay PAYG instalment on a quarterly or annual basis is determined by the ATO. The following table details PAYG Instalment due dates for the 2024 Financial Year:

PAYG Frequency	Period	Lodgement and Payment Due Date
Quarterly	1 July 2023 – 30 September 2023	28 October 2023
	1 October 2023 – 31 December 2023	28 February 2024
	1 January 2024 – 31 March 2024	28 April 2024
	1 April 2024 – 30 June 2024	28 July 2024
Annually	1 July 2022 – 30 June 2023	21 October 2023
Annually	1 July 2023 – 30 June 2024	21 October 2024

Reconciling PAYG Instalments Paid with your SMSF’s Actual Tax Liability

Given the PAYG Instalments are essentially a prepayment of the SMSF’s actual tax liability, the total PAYG instalment for the year is then credited against your SMSF’s actual tax liability to determine whether you owe more tax or are owed a refund upon lodgement of the Tax Return.

Example:

PAYG instalment is greater than the actual tax liability

Following our previous example, Barney’s SMSF paid $1,000 PAYG instalment to the ATO for 2024 Financial Year. When the 2024 tax return is prepared, the actual tax liability his SMSF is required to pay is only $950. Since $1,000 PAYG instalment has already been paid, his SMSF will be entitled to a refund of $50 ($1,000 - $950) from the ATO.

PAYG instalment is less than the actual tax liability

Assume Barney’s SMSF is required by the ATO to pay $2,500 PAYG instalment for each quarter during the 2024 Financial Year instead. Accordingly, Barney’s SMSF paid a total of $10,000 ($2,500 x 4) as PAYG Instalment. However, when the 2024 tax return is prepared, his SMSF’s actual tax liability is $12,800. Thus, his SMSF owes the ATO an additional $2,800 ($12,800 - $10,000). The $2,800 net income tax payable will be shown on the Income Tax Notification.

ATO Penalties

The tax laws authorise the ATO to impose administrative penalties on SMSFs for late lodgement or payment. Failure to lodge your SMSF’s Tax Returns or Activity Statements by the due date may result in late lodgement penalties as well as interest charges imposed by the ATO. The penalty is calculated at a rate of one penalty unit for each period of 28 days (or part thereof) that the return or statement is overdue, up to a maximum of five penalty units. Please note that one penalty unit is currently valued at $313.

If your SMSF fails to pay any outstanding tax liability amount by the due date, your SMSF may also be liable to five penalty units. In addition, a General Interest Charge (GIC) will be applied and calculated daily on any outstanding tax liability amount.

Receiving ATO Penalty Notices

If your SMSF is liable for any ATO penalty, ESUPERFUND will forward the associated notices to you via Client Portal Inbox. The notice will provide you with the penalty amounts, payment details and instructions.

Requesting Remission

You may request a reduction or cancellation of the penalties. However, the decision to remit penalties is subject to the ATO’s discretion and only the ATO has the power to remit penalties imposed on your SMSF. To request a remission, please contact the ATO directly at 13 11 42 between 8.00am and 6.00pm from Monday to Friday (except for national public holidays).

Release Authorities

A Release Authority is issued by the Australian Taxation Office (ATO) when an individual elects to release funds from a Superfund to meet certain ATO tax obligations. When the Superfund receives a valid Release Authority from the ATO, it is authorised to release an amount from the member’s super account.

From 1 October 2021, all Superfunds, including SMSFs must comply with the SuperStream rules when a member elects to release funds from the SMSF for certain types of release authorities.

Failure to comply with the SuperStream rules may lead to a qualified audit report.

The following section discusses the common types of release authorities:

Division 293 Tax

Concessional Contributions are taxed in the SMSF at a concessional rate of 15%. For a high income earner, the marginal tax rate is higher than an average income earner. Therefore, when a high income earner makes concessional contributions to the SMSF, a larger tax concession is received. Division 293 imposes an additional tax of 15%, thereby bringing the concession back to an amount in line with the average.

The threshold for Division 293 Tax is $250,000, i.e. Division 293 tax applies to individuals with income greater than $250,000.

If you have been assessed with Division 293 Tax, you may release the amount (or some of it) from your SMSF by completing an election form and send it to the ATO for processing. Once the ATO has processed your election form, they will issue a Digital Release Authority to the SMSF via the SuperStream channel. Upon the receipt of the Digital Release Authority, ESUPERFUND will contact you to confirm whether you wish to proceed with releasing funds from your SMSF and how much to be released by sending a detailed message to your Client Portal Inbox. We caution that it is a breach of the SIS regulation if you release funds from the SMSF prior to receiving the Release Authority from the ATO.

For more information on the steps involved on completing the Release Authority and arranging the payment to the ATO, please click here. For further details regarding Division 293 Tax, please visit the ATO’s website here.

Excess Concessional Contributions

When you exceed your concessional contributions cap, your excess concessional contributions will be taxed at your marginal tax rate. You may lodge an irrevocable election to the ATO within 60 days of your Determination Letter issue date to release up to 85% of your excess concessional contributions. The released amount may be used to pay the income tax on your excess concessional contributions. When the election has been made, the ATO will issue a Digital Release Authority to the SMSF via the SuperStream channel. Upon the receipt of the Digital Release Authority, ESUPERFUND will contact you to confirm whether you wish to proceed with releasing funds from your SMSF and how much to be released by sending a detailed message to your Client Portal Inbox. We caution that it is a breach of the SIS regulation if you release funds from the SMSF prior to receiving the Release Authority from the ATO.

For more information on the steps involved on completing the Release Authority and arranging the payment to the ATO, please click here. For further details regarding Excess Concessional Contributions, please visit the ATO’s website here.

Excess Non-Concessional Contributions

For excess non-concessional contributions, you may lodge an irrevocable election to the ATO within 60 days of your Determination letter issue date to release the full amount above your cap including the associated earnings. When the election has been made, the ATO will issue a Digital Release Authority to the SMSF via the SuperStream channel. Upon the receipt of the Digital Release Authority, ESUPERFUND will contact you to confirm whether you wish to proceed with releasing funds from your SMSF and how much to be released by sending a detailed message to your Client Portal Inbox. We caution that it is a breach of the SIS regulation if you release funds from the SMSF prior to receiving the Release Authority from the ATO.

For more information on the steps involved on completing the Release Authority and arranging the payment to the ATO, please click here. For further details regarding Excess Non-Concessional Contributions, please visit the ATO’s website here.

Excess Contributions Tax (ECT)

As noted above, if you exceed your Non-Concessional Contribution caps, the ATO will provide you with the option to elect to release the excess contributions from the SMSF. If you choose not to withdraw the amount from the Superfund environment, the ATO will issue a Digital Release Authority to the SMSF via the SuperStream channel to release the excess contribution tax.

For more information on ECT, please click here.

ATO Penalties

All information relating to your income and contributions reported to the ATO should be as accurate as possible. Otherwise, you may be liable for false or misleading statement penalty imposed by the ATO. This penalty amount varies depending on circumstances and could be a significant amount. SMSFs that do not meet their excess contributions and Division 293 release authority obligations may result in a penalty of 20 penalty units where each penalty unit is currently valued at $313.

Providing Information to ESUPERFUND

The process of preparing your SMSF’s Annual Compliance Documentation involves you providing additional information to us through the Annual Checklist. You may refer to this link for further details regarding the preparation process.

This table details how additional information for ATO-related transactions can be provided to us.

Transaction type	Code Transaction	Document required for audit purposes
SMSF supervisory levy	Income Tax Payment (incl. ATO Levy) or ATO Refund	No document is required. ESUPERFUND has access to the transaction history of your SMSF’s Income Tax Account via the ATO Tax Agent Portal.
Income Tax	Income Tax Payment (incl. ATO Levy) or ATO Refund
Goods and Services Tax	GST Payment or GST Refund	No document is required. ESUPERFUND has access to the GST lodgement history and statements via the ATO Tax Agent Portal.^(a)
PAYG Instalments	PAYG Instalment Payment	No document is required. ESUPERFUND has access to the transaction history of your SMSF’s Integrated Client Account via the ATO Tax Agent Portal.
ATO Penalties^(b)	ATO Penalty	ATO Penalty Notice
Division 293 Tax	Division 293 Tax	No document is required. ESUPERFUND has access to the Digital Release Authority SuperStream message.^(c)
Excess Concessional Contributions	Release of Excess Concessional Contributions
Excess Non-Concessional Contribution	Release of Excess Non-Concessional Contributions
Excess Contributions Tax	Excess Contributions Tax

Note (a): If the SMSF’s GST return has been lodged by you directly, a detailed breakdown of the GST Return (i.e. listing of transactions, and GST amounts claimed/paid) will be required to enable us to reconcile your SMSF’s GST amount in your SMSF’s accounts.
Note (b): Only ATO Penalties issued to your SMSF can be paid from your SMSF’s bank account.
Note (c): Please note that any document other than the Release Authority (e.g. Notice of Assessment or Determination letter) would not be sufficient for audit purposes.

Contacting the ATO

If you have any queries or requests relating to your SMSF’s tax return or your super contributions, please contact the ATO directly via the following phone numbers between 8.00am to 6.00pm from Monday to Friday (except for national public holidays). When contacting the ATO, you may be requested to provide the SMSF's name, ABN or TFN, your personal TFN, and if applicable, the reference number detailed on the ATO notice.

Phone number	Types of queries or requests
13 11 42	Request lodgement due date extension
	Request tax payment due date extension
	Request remission of tax penalties
13 10 20	Enquiries about the objection process for your excess concessional contributions determination, excess non-concessional contributions determination or ECT assessment
	Find out how much you contributed into your super
	Other superannuation enquiries