Proposed Superannuation Guarantee Amnesty – Have you correctly paid your staff super?

The Australian Government has proposed a Superannuation Guarantee (SG) Amnesty which has not yet been enacted by Parliament. What would it mean for you as an employer?

Proposed Superannuation Guarantee Amnesty

An amnesty would enable employers to self-correct any past non-compliance of their superannuation guarantee to employees. You would be asked to voluntary disclose superannuation guarantee shortfall and non-payment to potentially avoid being liable for:

• Extra administration fees associated with late payments
• Penalties of up to 200%

Also, superannuation guarantee amounts voluntarily disclosed and paid (in full or on payment plan) during an amnesty would be tax deductible.

Until such time as the proposed amnesty passes royal assent, under current existing law, an employer who has neglected to maintain accurate payment of superannuation to their employees is liable to the Australian Taxation Office (ATO) for outstanding staff superannuation.

When superannuation is not paid on time in to the correct fund or at the minimum amount by employers, the ATO is responsible for collection of unpaid superannuation under their Superannuation Guarantee Charge (SGC) arrangement.

SGC – How to pay?

If you have a superannuation guarantee shortfall to rectify, you are required to lodge a SGC Statement by the quarterly due date and pay any superannuation guarantee shortfall to the ATO. This statement enables you to report and calculate what is still owing to your employees and to the ATO (administration fee).

The SGC covers any unpaid or underpaid amounts due to employees, any interest on those amounts and an administration fee of $20 for each employee affected by your error. The SGC is a non-tax-deductible amount.

For the first quarter of the current financial year, 1 July – 31 October, the due date to lodge your SGC Statement is 28 November 2019.

SGC – How to avoid paying it?

Although the ATO ultimately will seek outstanding superannuation guarantee amounts for employees, it is important that all employers aim to pay and succeed in paying their obligatory superannuation guarantee to their employees in a timely manner.

Single Touch Payroll (STP), compulsory for all Australian employers from 1 July 2019, is the new reporting method of salaries, wages, PAYG withholding tax and superannuation to the ATO. By using STP-enabled software to report to the ATO, you will be able to keep informed of any miscalculations and revise staff superannuation payments immediately, thereby potentially avoiding the SGC.

Future Outstanding SG Payments – What will happen?

Recently, the proposed Superannuation Guarantee Amnesty was re-introduced in to Parliament for further consideration and debate. Whilst a SG Amnesty is not yet law, failure to pay the superannuation guarantee to employees may result in penalties under new legislation passed in December 2018: a fine of up to $10,500 or 12 months’ jail time.

All employers must abide by their obligation to pay their employees the superannuation guarantee. With STP-enabled software, businesses can face a future without penalty.

Avoid relying on the proposed SG Amnesty to stop you neglecting your SG obligation. Rather, it is important to seek professional advice about payment options now.

How can YML help?

Talk to our Accountants today to see how YML Chartered Accountants can assist you with your Superannuation Guarantee obligation. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.