On the 6th of March 2020 the government introduced a superannuation guarantee (SG) amnesty.

This amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018, without incurring the administration component ($20 per employee per quarter) or Part 7 penalty.

In addition, payments of SGC made to the ATO after 24 May 2018 and before 11:59 PM 7 September 2020 will be tax deductible.

To find our more information on the SG amnesty, visit the ATO website

Great for employees, good for employers

This has been a drawn-out process, with the SG amnesty legislation stalled at a federal government level. But, with the passing of the legislation, employers have the chance to ensure all their super payments are correct and up to date, without facing financial penalties.

With potentially billions of dollars of unpaid super owed to Australian employees, any legislation that encourages employers to rectify this situation is a good

An important point to note, is that any employers who don’t come forward in this amnesty period and are audited and found to have underpaid employees will face significant financial penalties.

Employers will be required to pay:

  • SG shortfall
  • nominal interest (10%)
  • administration component ($20 per employee per quarter)
  • Part 7 penalty (up to 200% of the SGC).

In addition, payments of the SGC won't be tax deductible.

Special circumstances surrounding Covid-19

The ATO has acknowledged that some businesses may not be fully able to pay back their SGC debt due to the effects of COVID-19.

To encourage employers to still apply for the SG amnesty, the ATO has created several options that will allow businesses to be more flexible with their payments. Find out more here.