Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 has been passed by the Government on 24 February 2020 and will become law after receiving Royal Assent.
The Bill introduces superannuation guarantee (SG) amnesty which will provide relevant employers with a one-off temporary amnesty from late payment penalties to correct their historical unpaid/underpaid employer superannuation guarantee Charge (SGC) for their employees.
What is the Super Guarantee Charge (SGC)?
If you don’t pay the minimum amount (currently 9.5%) of super guarantee (SG) for your employee into the correct fund by the due date you may have to pay the super guarantee charge (SGC), which is not tax-deductible.
The charge is made up of:
- SG shortfall amounts
- interest on those amounts (currently 10%)
- an administration fee of $20 per employee, per quarter.
You report and rectify the missed payment by lodging an SGC statement by the due date and paying the SGC to the ATO.
What are the benefits of disclosing during SG Amnesty?
The amnesty provides employers with a number of concessions if they pay qualifying outstanding SGC that:
- relates to the period 1 July 1992 until 31 March 2018; and
- is paid during the amnesty period (24 May 2018 until 6 months after the date of royal assent
The benefits provided by the amnesty include:
- The SGC (comprised of the SG shortfall amounts, interest and the administration fee) will be deductible to the employer: Normally, payment of the SGC is non-deductible.
- The administration fee will be waived: Normally, this is calculated at a rate of $20 per employee, per quarter.
- No penalties will be applied for failing to lodge an SG statement: In usual circumstances this can be up to 200% of the SGC amount.
WARNING! Employers who fail to come forward during the amnesty period will likely be subject to higher penalties and strong enforcement by the ATO. The Commissioner will not generally have the discretion to remit the penalty to below 100% of the SGC.
Cloud8 highly recommend effected employers to take advantage of this amnesty
For employers who believe that you may have underpaid/or late superannuation we strongly recommend that you take advantage of this amnesty before it expires at the end of August 2020 (6 months after Royal Assent).
Employers with historical SGC owing remaining unpaid may be entitled to the SG amnesty which can reduce tax penalties and obtain tax deductions for their payments. This is the last opportunity to come forward, before potential higher penalty!
We recommend you to speak with Cloud8 as soon as possible by making an obligation free appointment with the button below: