On 6 March 2020 the Australian Government introduced a superannuation guarantee (SG) amnesty that enables employers to disclose and pay any previously unpaid superannuation guarantee charge (SGC), including nominal interest, that they owe their employees from the quarters starting 1 July 1992 to 31 March 2018.
SGC would apply where employers have either not paid (or under paid) superannuation for their employees or who have paid superannuation late (that is, paid after the 28th day of the month following the end of the quarter in which the obligation to pay arose).
Employers making eligible disclosures under the amnesty will not incur the administration penalty (which is $20 per employee per quarter) or the part 7 penalty (which is up to 200% of the SCG). Additionally, payments of SGC made to the ATO after 24 May 2018 and before 11:59pm on 7 September 2020 will be tax deductible (ordinarily, payments of SCG are not tax deductible).
To be eligible for the amnesty you must meet and fulfil all the following criteria:
- Have not been informed that the ATO is examining or intends to examine your SG obligations for the quarter(s) your disclosure relates to.
- Disclose an SG shortfall for an employee that you haven't already disclosed to the ATO (or disclose additional amounts of SG shortfall for a quarter previously disclosed).
- Disclose for quarter(s) starting from 1 July 1992 to 31 March 2018.
- Lodge the completed SG amnesty form with the ATO so it is received no later than 7 September 2020.
As the amnesty period is ending, it is important that if you have underpaid SG that you act now.
The ATO has increased ability to identify underpaid SG through greater data visibility as a result of more frequent reporting by superannuation funds and employers (particularly with the move to Single Touch Payroll by the majority of employers).
If the ATO subsequently identifies that you have underpaid SG for a quarter that was covered by the amnesty that you have not disclosed, then in addition to SG shortfall you will also be liable for:
- The administration component ($20 per employee per quarter).
- Up to a 200% Part 7 penalty.
- Nominal interest (10%).
- General interest charge.
Additionally, you cannot claim a tax deduction for the SGC paid.
Should you have any questions in relation to your eligibility to access the amnesty or require any assistance in applying for the amnesty, please contact us urgently.