ATO Payments

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.

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).

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 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.

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:

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.

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).