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.
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.
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.