The problem with contributions that are made through clearing houses
For income tax purposes (including contribution capping purposes), where an employer contribution is made to a superannuation fund (including an SMSF) through a clearing house, the contribution is made when it is received by the fund (and not when the clearing house receives the payment from the employer).
This means the use of the clearing house is effectively ignored for determining ‘when’ the contribution has been made for income tax purposes. Accordingly, the contribution is deductible to an employer (assuming the conditions in Subdivision 290-B of the ITAA 1997 are satisfied) and assessable to the superannuation fund, when it is received by the fund. Similarly, a contribution will only count for capping purposes once it is received (and subsequently allocated) by the superannuation fund.
EXAMPLE – Contribution made to clearing house towards year-end
ClearCut Pty Ltd (‘ClearCut’) paid a commercial clearing house $20,000 by direct debit on 24 June 2019 to cover SG contributions for the June 2019 quarter for its employees, which are forwarded (by the clearing house) to each employee’s chosen fund on 15 July 2019.
In this case, the $20,000 contribution is deductible to ClearCut, and assessable to each fund, in the 2020 income year (and not the 2019 income year), being when it was received by each fund. The contribution made for each employee will also count towards their concessional contributions cap for the 2020 income year.
Further, where an SG contribution is made via a clearing house (that is not an approved clearing house such as the ATO’s SBSCH – refer below), the contribution is made for SG purposes when the superannuation fund receives it from the clearing house. Refer to Superannuation Guarantee Determination (‘SGD’) 2005/2. However, special rules apply for SG purposes where a contribution is made through an ‘approved clearing house’ .
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