DFK Gooding Partners

June 17, 2020

Categories: Superannuation

Update: See the update from the Australian Taxation Office here.

Just a reminder that the Super Guarantee Amnesty is still available until the 7th of September 2020 if you would like to make full use of this amnesty, you must make the relevant payments before this date. If you are unable to make the payment due to COVID-19, the ATO will work with businesses to arrange payment plans which will allow you to access some of the benefits but not all.

This amnesty applies to historical superannuation guarantee contributions for employees that may have been underpaid in pay periods between 1 July 1992 and 31 March 2018.

These measures:

  • Allow employers to claim a tax deduction for payments of superannuation guarantee shortfall contributions made during the amnesty period (usually non-deductible);
  • Remove the administrative component (usually $20 per quarter per employee is removed); and
  • Remove penalties that may be imposed on SG non-compliance (these can be up to 200% of the amount of the underlying SG charge).

If an employer chooses to use this amnesty they should be aware that nominal interest (to offset the income the employee lost if the contribution had been paid on time) and general interest charges may still apply to the shortfall contribution amounts.

Furthermore to qualify for this amnesty, employers are required to disclose and pay any outstanding amounts during the amnesty period, being 24 May 2018 to six months from the date this new legislation receives royal assent (approximately the end of August 2020).

This new legislation also imposes a minimum penalty on non-disclosure of SG shortfall amounts in the future. This will apply where an employer fails to come forward during the amnesty period and the underpayment is later discovered by the Australian Taxation Office.

We recommend all employers undertake a review of their payroll system and make use (where applicable) of this generous amnesty.

To assist, we have completed a 1 minute superannuation guarantee health check which outlines some of the questions you may need to consider.