Superannuation Guarantee Temporary Amnesty
In preparation for the substantially more transparent reporting obligations of Single Touch Payroll (STP), the Turnbull government wanted to give Employers a chance to catch up on all their Superannuation obligations. So, on May 24th 2018 the Minister for Revenue and Financial Services announced the commencement of a 12 month Superannuation Guarantee Amnesty (the Amnesty).
STP will throw a spotlight on non-complying employers and trigger more and more audits and subsequent penalties, making it harder for employers to continue to ignore their obligations to their employees.
If the legislation is passed through Parliament, the Amnesty is a last chance opportunity for employers to voluntarily correct past superannuation guarantee (SG) compliance issues;
- without paying late lodgement penalties
- without paying the standard administration fees, and
- with full tax deductibility of the catch-up payments in the year that they are paid.
While employers will still be obligated to pay all the employees entitlements, which includes any unpaid SG amounts, the nominal interest on those amounts, and any general Interest Charges (GIC), this is great news for employers who have fallen behind on their Super responsibilities. Coming forward voluntarily during the Amnesty could save them from the possibility of substantially higher penalties in the future, with current legislation being resumed after the Amnesty period – 24 May 2018 to 23 May 2019.
Under current legislation, if SG are not paid into complying Superannuation funds by the payable dates, there may be penalties issued of up to 200% of the shortfall. Administration fees of $20 per employee per quarter are payable. Also, superannuation is calculated on all earnings, not just ordinary time earnings (OTE), meaning you must pay SG on all overtime, penalty, bonuses, leave entitlements and so on. Last but not least the overdue super payments are not tax deductible when they are paid outside the required due dates.
Any Australian employer that is not currently undergoing a SG Audit by the ATO is eligible to voluntarily participate in the Amnesty. The Amnesty applies to previously un-reported SG shortfalls for any period from 1 July 1992 up to 31 March 2018. However, it does not apply to the period starting on 1 April 2018 or any following periods.
Participating is a simple process.
If you are able to pay the full SG deficit amount directly to your employees’ super funds, then complete a SG Amnesty fund payment form and submit it to the ATO electronically through your business portal.
If you are not able to pay the full SG deficit amount directly to your employees’ super funds, then complete SG Amnesty ATO payment form and submit it to the ATO electronically through your business portal. The ATO will then contact you to arrange a payment plan. Payment plans will have the GIC applied.
If you currently have any unpaid superannuation we highly recommend taking up this fantastic opportunity to catch up on your obligations in the most cost effective way possible. If you need any help preparing any of the forms or calculations please don’t hesitate to contact us and let us help you as we have many other businesses.