On 6 March 2020, the government introduced a super guarantee (SG) amnesty (the amnesty). The amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018.
Eligible disclosures will not incur the administration component ($20 per employee per quarter) or Part 7 penalty.
In addition, payments of SGC made to the ATO after 24 May 2018 and before 11.59pm on 7 September 2020 will be tax deductible.
Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again (see Disclosures of unpaid SG between 24 May 2018 and 6 March 2020).
Employers who come forward from 6 March 2020 need to apply for the amnesty by 7 September 2020.
The ATO will continue to conduct reviews and audits to identify employers not paying their employees SG. If the ATO identify these employers before they come forward, they will not be eligible for the benefits of the amnesty.
They will also be required to pay:
- SG shortfall
- nominal interest (10%)
- administration component ($20 per employee per quarter)
- Part 7 penalty (up to 200% of the SGC).
In addition, payments of the SGC won’t be tax deductible.
Paying super is an important part of being an employer. If you’re not eligible for the amnesty, or you have unpaid super for quarters that are not eligible, you must still lodge an SGC statement.
Why you should act now
The ATO’s ability to identify underpaid SG has increased through greater data visibility as a result of more frequent reporting requirements by super funds and employers.
The ATO is increasingly using this capability to identify employers that have underpaid SG.
If the ATO identify underpaid SG amounts for a quarter that was covered by the amnesty that you have not disclosed, in addition to the SG 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.
Please note amnesty applications must be lodged by the 7th September 2020.
If you would like to discuss this amnesty opportunity in greater detail please contact us today
