By Gary Calford, Gary CalfordPartner - Taxation
12 August 2020
If you believe you have underpaid super for your employees, we can assist you in applying for the ATO Super Guarantee Amnesty. Applications will end on 7 September 2020, so this is an opportunity to catch up on any unpaid super without the normal penalties applying.
Have you met your super guarantee requirements?
This amnesty also applies to superannuation that have been mistakenly omitted from payment. If you believe any of the following apply to you please contact your local office immediately to apply for the amnesty:
- Super payments made on time: payments must be received by employee funds by the 28th day after quarter-end to meet super guarantee requirements. Where using a clearing house, sufficient time needs to be given to ensure the clearing house can process payments within that time frame, except where they use the Small Business Super Clearing House with the ATO.
- Super paid for contractors: super guarantee liability arises where a contractor is an employee at common law or under the extended definition of ‘employee’ in the Superannuation Guarantee legislation. In our experience, this distinction can be inappropriately considered and applied.
- Super paid on all Ordinary Times Earnings: an employer’s super guarantee liability is determined by reference to an employee’s Ordinary Times Earnings. In our experience, certain payments that can amount to Ordinary Times Earnings are not included in the employee’s superannuation calculation. Some of the payments we see incorrectly paid without super include:
- Leave loading
- Shift loadings
- Ex-gratia payments
Are you eligible?
- The unpaid superannuation must relate to quarters between 1 July 1992 and 31 March 2018.
- You must not have previously told the ATO about the unpaid super, or be under review by the ATO for the unpaid super.
- You must apply to the ATO for the amnesty by using the correct form no later than 7 September 2020.
What does the amnesty entail?
- Payments of super contributions and super guarantee charge made after 24 May 2018 and before 11:59 pm 7 September 2020 will be tax deductible.
- You won’t be required to pay the administration component ($20 per employee, per quarter).
- You won’t have Part 7 Penalty applied (up to 200% of SGC).
- Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again.
- Employers who come forward from 6 March 2020 need to apply for the amnesty using the approved SG amnesty form. Please contact your local office for assistance in completing this form correctly.
If you have unpaid superannuation guarantee and do not come forward during the amnesty period:
- The ATO will continue to conduct reviews and audits on employers and if they identity non-compliant employers before they come forward, they will not be eligible for the amnesty, payments of SGC will not be tax deductible and they will be required to pay:
- Super Guarantee Shortfall
- Nominal interest (10%)
- Administration component ($20 per employee, per quarter)
- Part 7 Penalty (up to 200% of the SGC)
If you are an employer who has unpaid Superannuation Guarantee to employees between 1 July 1992 and 31 March 2018 please contact your local office as soon as possible to discuss taking advantage of the Superannuation Guarantee Amnesty.