On 24 May 2018 the Minister for Revenue and Financial Services announced a 12 month amnesty for all employers to enable them to pay any past superannuation guarantee shortfalls without penalties.
The legislation is before parliament and needs to be passed to come into effect. The 12 month amnesty is for the period 24 May 2018 to 23 May 2019. During the amnesty, any Australian employer who has previously unpaid superannuation or not paid by the due dates, will be able to lodge and pay their superannuation and enjoy the following benefits
- No penalties for late lodgement
- No admin fee will be payable
- All superannuation guarantee catch up payments are fully tax deductible in the year they are paid
This is fantastic news for employers. Under current legislation, superannuation guarantee payments are compulsory. If not paid by the due date, there may be penalties issued of up to 200% of the shortfall, an admin fee of $20 per employee per quarter is payable, superannuation is calculated on all earnings, not just ordinary time earnings which means you must pay super on all overtime, bonuses etc. and the overdue super payments are not tax deductible when paid outside the due dates.
Who is eligible?
If you are an employer in Australia and are not currently undergoing a superannuation guarantee audit, you are eligible to voluntarily participate in the amnesty.
If you have unpaid or overdue superannuation payments for the period 1 July 1992 to 31 March 2018, you may participate
How do you participate in the Amnesty?
If you would like to take up the offer of the amnesty and you are able to pay the unpaid superannuation in full, then you will need to complete a Superannuation Guarantee Charge Statement. Use the online SGCS Calculator Tool. Use the data from this online form to populate the Superannuation Guarantee Amnesty Payment Form and pay the amounts into the employees’ super funds. Form must be lodged with the ATO. You can do this via the Business or BAS portals. You must then advise your employees of the amounts and interest you have paid into their funds.
If you are unable to pay the full superannuation shortfall, then complete a Superannuation Guarantee Charge Statement. Use the online SGCS Calculator Tool. Use the data from this to fill out a Superannuation Guarantee Amnesty Fund Payment Form. Lodge this form with the ATO via the Business or BAS Agent portal and advise your employees of the payments.
The reason for the amnesty is due to the introduction of Single Touch Payroll. STP is mandatory electronic reporting of payroll data directly to the ATO and begins on 1 July 2018 for employers with 19 or more employees and 1 July 2019 for all other employers. Find out more about STP here.
In preparation for STP, the ATO would like to give employers an amnesty period to catch up their superannuation and avoid penalties. Once STP comes in, the penalties may be higher but transparency over late lodgement will increase which will make it more difficult to avoid paying super. It may also highlight to the ATO non-payers and this could trigger superannuation audits.
If you have any unpaid superannuation, it is our advice you take up the opportunity presented now and catch up your superannuation. If you need help preparing this, contact us as we have helped many small businesses catch up their superannuation obligations. The ATO are often willing to allow business owners to go on a payment arrangement.