The Government is offering an amnesty to employers for any unpaid superannuation payments due to employees for the period 1 July 1992 to 31 March 2018.
The amnesty has now been extended until 7 September 2020. Only payments made before 11.59pm on 7 September 2020 will be tax deductible.
The Superannuation Guarantee Amnesty is a government initiative to give employers a ‘one-off’ opportunity to come forward and rectify any past unpaid superannuation payments, without being subjected to the usual heavy penalties, and also being able to claim a tax deduction for the shortfall payments. Employers will still have to pay the outstanding amounts and the prescribed high interest amounts on them.
Employers who have, or think they may have, past shortfalls should strongly consider paying any shortfall to avoid the increase in penalty obligations under this new legislation. In general, this is a minimum 100 per cent penalty on top of the superannuation payment shortfall owed, and up to 200 per cent for the most serious cases of underpayment.
The key provisions of the Amnesty are:
- Only applies to any historical breaches from 1 July 1992 – 31 March 2018.
- Amnesty period is where the employer voluntarily discloses the amounts of superannuation shortfalls within the period between 24 May 2018 to 7 September 2020.
- The amnesty only applies to amounts not previously disclosed and not already the subject of an ATO examination or an intended examination. An exception to this rule applies where:
– employers have previously lodged a superannuation shortfall disclosure, but understated the amount of shortfall; and
– come forward with additional information;
– then, they may qualify for the beneficial treatment for the additional amounts disclosed, provided the employer otherwise meets the qualifying conditions of the Amnesty.
- Disclosure must be in an approved form.
- Employer may choose to pay up all at once, or
- If they will have difficulty in doing so, they may negotiate a payment plan;
- The superannuation shortfall is the actual amount plus general interest charges.
Benefits under the Amnesty
- If an employer takes advantage of the amnesty, they can avoid the admin fee of $20 per employee and other applicable penalties within Part 7 of the Act, for example:
– Director’s personal liability.
– up to 200% penalties, general interest charges on the penalties.
– Administrative penalties.
Not sure if you may have a shortfall? Here are some of the typical causes of underpayments:
- Not adjusting the superannuation payment to 9.5% from 1 July 2014;
- Non- payment of superannuation on annual leave loading;
- Non – payment of superannuation on sales commission;
- Incorrect payroll system settings missing payments that are to be included;
- Missing allowances that are included, such as first aid allowances;
- Not including pay-in-lieu-of-notice payments.
ER Strategies can help with general advice on your super obligations. Contact us on 02 8907 3888 to speak to one of our ER consultants.