ATO Amnesty on Employer SG Obligations

Last month saw the resurrection of the proposed SG amnesty after the previous bill failed to pass through Parliament.

What is the Proposed Superannuation Guarantee Amnesty?

The Superannuation Guarantee amnesty is a one-off amnesty which works to encourage employers that have fallen behind with their SG obligations the ability to "self-correct" on historical non-compliance. To qualify employers must disclose the outstanding SG to the Tax Commissioner and either pay the full amount owing or enter into a payment plan. The Superannuation Gap is estimated at around $2.85 billion in late or missing SG payments.

When does the amnesty apply?

If the bill passes through without any amendments, the amnesty period ends six months from the day the SG amnesty gets Royal Assent. Depending on the scale of the underpayments and the complexity level, six months could be difficult for some businesses to achieve with self-checks.

Benefits of the Amnesty

• The administration fees of $20 for each employee with a shortfall per quarter are waived
• The penalties of up to 200% are waived
• The Super Guarantee charge payments made under the amnesty are tax deductible (without the amnesty late payments of super are not deductible).

What Are the Changes With The Amnesty on Superannuation Obligations?

There are a few changes in obligations with this amnesty. The legislation amends the law to ensure that tougher penalties apply to taxpayers who do not take advantage of the amnesty. When an employer fails to meet their SG obligations additional penalties of up to 200% can be imposed on them.

What should you do?

Even if you don't believe your business has outstanding SG liabilities, it is worth undertaking a payroll audit to ensure that your payroll calculations are correct.

If your business has engaged any contractors during the period covered by the amnesty, then the arrangements will need to be reviewed as it is common for workers to be classified as employees under the SG provisions even if the parties have agreed that the worker should be treated as a contractor.

Now you know how the proposed Superannuation Guarantee amnesty treats late payments on employee's superannuation and what it wants employers to do to correct it.

At the moment the Murray Nankivell accounting team are busy speaking with clients about the proposed ATO Amnesty on Superannuation Obligations. If you're a business owner, it's essential that you pay attention to the changes to avoid possible penalties so please contact us at Murray Nankivell for further information.