There are BIG penalties if employers do not fulfil their Super Guarantee (SG) payments and Charge Statements.
Through the approval of a 6-month SG Amnesty, Parliament has granted employers the opportunity to apply for dispensation of regular SG penalties pending authorisation from the ATO. This is relevant for any quarter from 1 July 1992 up until the 31 March 2019, on the proviso that the employer self-reports their SG non-compliance. To do so, employers may access and complete the ‘approved form’ on the ATO website by September 2020.
- If the ATO has not declared to an employer that they are investigating their past SG Compliance for a nominated quarter, nor has the employer previously been excluded from participation, they are eligible to apply for amnesty.
- Note: Should an employer fail to enter a payment plan with the ATO or fail to repay SG charges imposed, the employer will forfeit the right to the assistance that the amnesty may have granted.
SG penalties apply under the amnesty:
- While there are ordinarily five penalties which can be implemented, only two may come into effect if an employer is granted amnesty. These are;
- Unpaid employer super contributions
- Notional unpaid earnings on unpaid contributions
- Unlike standard penalties, these charges will be tax deductible.
- After the period of granted amnesty has elapsed, an employer will once again be vulnerable to the regular five, non tax-deductible penalties. The penalties will apply from before the amnesty was granted if SG payments are not made.
- An employer who declared their infringement of SGC guidelines to the ATO after the 6th of March 2020, will need to apply for amnesty. However, if infringements were disclosed between 24 May 2018 and 6 March 2020, they need not apply again.
If the ATO identifies that an employer has not been making correct SG payments on behalf of their employees, the employer will no longer qualify for the aid of the amnesty. Furthermore, these employers will be instructed to pay:
- SG shortfall
- Nominal interest
- $20 per employee per quarter (administration costs)
- Part 7 penalty (up to 200% of the SGC)
- Furthermore, payments of the SGC will not be tax deductible
If you have any questions or concerns regarding your business’ SG compliance, ESV are here to help – just reach out to your engagement partner.