Clarification on Superannuation Guarantee (SG) and Commission Clawback

 Author: PayrollDeanne(Taxicorn)Taxicorn

10 Apr 2025

Hiya @yoketeng 👋

Firstly, the ATO guidance on overpayments identifies that, upon discovery of the overpayment, you correct the gross (no longer a commission) and either recover the PAYGW (current FY) or amend (prior FY). The Fair Work Ombudsman also has detailed guidance on both overpayments and deductions (recovery of overpayment).

Naturally, and as you've discovered, the ATO doesn't have adequate SG guidance on overpayments 🙄

However, let me answer your questions:

1. Yes, if you haven't paid it yet. No, if you have paid it, see my answer to question 2.
2. There are two options available to you:
   1. Yes, as per APRA SPG 270 paragraphs 24-36 for Contributions in error, it may be refunded, but it takes an average of 3 months to receive the refund!
   2. Yes, as per SGAA 1992 S23(7), you can treat it as a prepayment for up to 12 months from the beginning of a quarter, excluding any salary sacrifice to superannuation.
3. Depends:
   1. Depends on how you addressed item 2 above and the timing of it. For example, if you are correcting in April for March, then April is the month OTE is reduced using option 2b. You recognise the "prepayment" in March to apply to April and future periods; or, if you went with option 2a, the reduction is your correction, awaiting the refund, not to be considered for April OTE.
   2. Commission was OTE when paid in March as $10,000. Overpayment is recognised in April, so -ve $10,000 OTE occurs in April. That is, "negative commission" is initially the prepayment option that can remain, or be offset by the refund option.
4. Documentation required under Fair Work record-keeping obligations (7 years) and ATO record-keeping obligations (5 years) that supports the reason the commission was not payable in March and your corrections.

Maybe the ATO will update its OTE and SG guidance to better explain the options and the timing impacts of overpayment of SG. 🤓

Deanne

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