If you missed paying or have underpaid an employee their super guarantee contributions, there is officially some relief available.
On 6 March 2020, the Federal Government introduced the super guarantee amnesty.
What is the super guarantee amnesty?
Designed to encourage employers to voluntarily disclose and self-correct their historical non-compliance, it provides employers with a one-off amnesty to correct any super guarantee shortfalls.
What is the amnesty?
Under the amnesty, as the employer, you are still required to pay out any super guarantee underpayments, along with any applicable interest amount (i.e. super guarantee charge).
However, if you have qualified for the amnesty, you can receive the following relief;
- Ability to claim a tax deduction on the super guarantee charge;
- Removal of the $20 administration fee (usually charged at per employee, per quarter); and
- No Part 7 penalty charge
To be eligible, you will need to lodge an SG amnesty form to the ATO before the amnesty period ends. You will also need to either pay the amount owing to the ATO or arrange a payment plan with them.
Any employers with super guarantee shortfalls and fail to voluntarily disclose them during the amnesty period may face the risk of being subjected to higher penalties from the ATO (i.e. up to 200% Part 7 penalty).
What period does the amnesty apply?
The amnesty period only relates to non-compliance between 1 July 1992 and 31 March 2018. Unfortunately, this means if you have missed payments or underpaid super guarantee to employees after 1 April 2018, these will not be included within the amnesty.
The amnesty period commences retrospectively from 24 May 2018 and will end at 11.59 pm on 7 September 2020.
For more information, including eligibility requirements and how to apply, visit the ATO website.
What if your business is impacted by COVID-19?
If your business is impacted by COVID-19, as at Tuesday 31 March, the ATO had stated on their website that they will work with you to arrange a flexible payment plan.
For more information on what is included in the flexible arrangement, visit the ATO website.
Important things to note
The ATO’s ability to identify underpaid SG has increased through greater data visibility as a result of more frequent reporting requirements by super funds and employers.
If the ATO identifies an employer who may have an SG shortfall, before they come forward, the employer will not be eligible for the benefits of the amnesty for the period under investigation by the ATO. Therefore, it is important to get on top of this early and to identify any SG shortfalls as soon as possible.
Also, if you haven’t read them already, we suggest also reading the following articles;
- Are you paying super to all eligible employees? – click here
- Changes to the super treatment of leave loading – click here
- Superannuation on annual leave loading – click here
Information provided in this article is general information, not legal advice and should not be relied upon as such. Definitiv does not accept liability for any loss or damage arising from reliance on the content of this article.