Employers Guide: Superannuation Guarantee Amnesty
Article by Robyn Tyler
What are an Employer’s Superannuation Obligations?
Employers are required to contribute the relevant superannuation payments to their employees nominated super fund by the due date. There are quarterly deadlines for this to be completed. ‘On time’ super contributions must be received by the employee’s superannuation fund by the due date. If this obligation isn’t complied with, a superannuation guarantee (SG) statement is required to be lodged and charges are typically applied, including interest and administration fees.
What is the Superannuation Guarantee Amnesty?
The Superannuation Guarantee Amnesty provides for a temporary amnesty from late payment penalties for employers to correct historical unpaid or underpaid employer superannuation. The amnesty period will finish on 7 September 2020.
The amnesty will provide relief from penalties that are usually applied to employers who fail to meet their SG obligations. The employer is still required to pay the SG shortfall and the interest applied to the shortfall.
To qualify for the amnesty, a voluntary disclosure must be made by the employer with the Australian Taxation Office (ATO) during the amnesty period. The amnesty period covered by the beneficial treatment is for shortfalls between 1 July 1992 and 31 March 2018. The period from 1 April 2018 to today is not covered by the amnesty.
Benefits of the Superannuation Guarantee Amnesty
Employers who qualify and make voluntary disclosures to the ATO will receive the following benefits:
- Allowed to claim a tax deduction for SG shortfall payments (typically SG paid late is not tax deductible);
- Not liable for administrative fee components ($20 per employee for each quarter);
- Liability to penalties of up to 200% of SGC reduced (further below).
Updates to the SGC Remission Guide
The ATO will be changing its SGC remission guide to the following:
- Employer voluntary disclosure on own accord: residual penalty between 0% and 20% of superannuation guarantee charge (SGC)
- Unprompted self-assessment but not come forward on own accord should attract a penalty of less than 100% of the SGC shortfall
- Prompted self-assessment and worse to attract penalties of 100% of the SGC
- Default assessments issued for worst cases such as phoenixing arrangements or severe disengagement by the employer may receive penalties of 200% of the SGC shortfall
Penalties for Not Disclosing Throughout The Amnesty Period
Employers who fail to report shortfalls during the amnesty period will likely be subject to higher penalties by the ATO after the amnesty period. With the recent introduction of Single Touch Payroll, the ATO is expected to increase activity in this area.
Next Steps for Employers
If you have staff and believe that you may have underpaid superannuation, we strongly recommend that superannuation guarantee amnesty be utilised before it expires. Employers with historical unpaid SGC may be entitled to the SG amnesty which can reduce penalties and obtain tax deductions.
We recommend you speak to your adviser as soon as possible to explore your available options. Should you wish to discuss your current situation or simply want a chat surrounding a possible superannuation concern, please do not hesitate to contact the SRJ Walker Wayland Team.
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