Superannuation Guarantee Amnesty
On 6 March 2020, just as COVID-19 was starting to cause mayhem, the government passed legislation for a Superannuation Guarantee Amnesty. The amnesty allows employers to disclose and pay previously unpaid Super Guarantee Charge, including nominal interest, that they owe to their employees for past quarters (1 July 1992 to 31 March 2018).
Despite intense lobbying for an extension, no changes have been announced and the Amnesty is due to expire on 7 September 2020.
- Tax deductions for payments of the Superannuation Guarantee Charge
- No administrative penalty of $20 per employee
- No Part 7 penalties (which could otherwise be 200% of the SG Charge owing).
You can find more details on the ATO’s website.
Important: Employers participating in the amnesty need to apply online by 7 September 2020. We recommend asking for assistance.
Paying superannuation is a key part of being an employer. It is becoming much easier for the ATO to detect non-payment of super, so non-complying employers should wisely consider their options, and apply to the ATO to take advantage of the amnesty.
What constitutes late payment of superannuation? Paying super for a quarter after the 28th of the following month – we’d be surprised if there are many employers who have not done this at least once in their business life. Even if you have paid in full after the due date, you are still liable for the Superannuation Guarantee Charge.
We previously wrote about this issue in a post we shared last year Superannuation payments – Pay on time, every time, no excuses! If you want the full legal explanation, we liked this explanation by HWL Ebsworth Lawyers.
So what if you have paid super late and don’t disclose late payment under the Amnesty? The ATO explanation delivers a clear message that the consequences are brutal:
If we identify underpaid Super Guarantee amounts for a quarter that was covered by the amnesty that you have not disclosed, in addition to the Super Guarantee shortfall you will also be liable for:
- the administration component ($20 per employee per quarter)
- up to a 200% Part 7 penalty (at minimum 100% if remission is applicable)
- nominal interest (10%)
- the general interest charge (GIC).
In addition, you will not be able to claim a tax deduction for the SGC paid.
Will the ATO pick your business for an audit? We don’t know, however we do know that after the Amnesty has expired the ATO has almost no leeway to provide forgiveness.
Please ask us if you have a question.