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Superannuation Guarantee Amnesty – Deadline Coming Soon!

Given everything that’s happened in 2020, you’ll be forgiven for forgetting a couple of things here and there.  One thing you won’t want to miss, especially if you have outstanding Superannuation Guarantee (SG) obligations, is the ATO’s Amnesty, which ends on the 7th September 2020.

Superannuation Guarantee Amnesty: The Details

The SG Amnesty has featured on the MP+ website a few times now; from its original iteration back in 2018, to its reintroduction in March 2020. To refresh, the amnesty means that Employers who haven’t paid the correct amount of superannuation on behalf of their Employees between 1 July 1992 to 31 March 2018 have a chance to pay the correct amount (and nominal interest) without incurring the usual penalties and administration charges generally attached to late payments.

Why Employers Should Take Advantage

Perhaps the most important point to be made on the importance of declaring and rectifying SG shortfalls is that it is the right thing to do by your Employees, both past and present. That aside, the longer-term implications of not taking advantage of the SG amnesty can be detrimental to your business.

If the ATO finds out through review/audit proceedings that there are SG shortfalls that were not declared, employers will have to pay:

• The SG shortfall plus interest;
• Expansion of SG obligations to include super on things like overtime, leave loading and termination payments (which are normally excluded);
• Nominal interest of 10%;
• $20 per-Employee, per-quarter “Administration Fee”
• Part 7 Penalty (up to 200% of the SGC)

These penalties can still be applied during the amnesty period if the ATO discovers unpaid super as opposed to a voluntary disclosure by the Employer.

Generally speaking, late SG shortfall payments are not tax deductible – however SGC payments made to the ATO between 24 May 2018 and 11.59pm 7 September 2020 will be tax deductible. Given the present economic circumstances – it all counts!

Next Steps

Note that this is the last chance to take advantage of the amnesty.

Going forward the ATO will not have to look particularly hard to find the businesses who still have SG payments outstanding, especially using improved data-matching resources like Single Touch Payroll (STP) – and it will be a matter of time before those not complying (even unintentionally) will be caught out.  We therefore recommend reviewing your payroll to determine if there are any SG payments outstanding – if you find any, disclose the amounts to the ATO and apply for the amnesty.

McKinley Plowman is here to help you through the Superannuation Guarantee Amnesty process.  Critically, we can assist you set up your payroll so that you don’t miss SG payments in the future. To find out more about what we can do for you, visit our website at www.mckinleyplowman.com.au or call us on 08 9301 2200.

written by:

Steven Lisle

Tax Manager Steven Lisle has been part of the McKinley Plowman team since 2007, and in that time has built his repertoire upon delivering industry leading, up-to-date international and Australian tax strategies and consulting services. Steve's clients enjoy the optimised tax outcomes he provides them, especially where complex structures could otherwise lead to significant tax obligations.