The ATO will offer an Amnesty to Employers on Super Guarantee payments

Draft legislation has been released which will encourage Australian employers to pay their employees superannuation amounts which are overdue.

This amnesty will be a one-off opportunity for employers to pay outstanding Super without penalty.

Employers who voluntarily disclose SG shortfalls during the Amnesty, and before the commencement of any audit of the Super Guarantee, will not be charged any administration fees or penalties, and will also be able to claim a tax deduction for catch-up payments made within the amnesty period.

This legislation, once passed  gives employers the chance to pay prior year superannuation contributions into employees funds before May 2019.  Employers must however pay the full amount owing along with any nominal interest in full, in order to avoid the penalties.  The amnesty applies to previously undeclared SG shortfalls for any period from 1 July 1992 up to 31 March 2018.  The amnesty does not apply to the period after 1 April 2018 or any future periods.

Should employers not take advantage of the amnesty period, the penalties of up to 50% on top of the SGC charges will apply.

The following powers have been given to the ATO to follow up employers who are not paying their employees superannuation:

  • Single Touch payroll will provide transparency of super payments – from 1 July 2018, employers with more than 20 employees will be required use single touch payroll.
  • Superannuation funds will be required to report contributions received monthly to the ATO. This will help the ATO find employers who are not contributing what they are obliged to.
  • High risk employers may receive Director Penalty Notices to ensure their superannuation liabilities are paid to the employee’s superannuation funds
  • The ATO will also be able to seek court-ordered penalties if employers continue to refuse to pay their superannuation guarantee obligations. This includes 12 months jail.

The legislation was introduced into Parliament on 24 May 2018, and is intended to apply retrospectively once passed.  Until this legislation passes, the current laws will apply.

Detailed information is available on the ATO website at this link:

https://www.ato.gov.au/Business/Super-for-employers/Superannuation-Guarantee-Amnesty/

Should you require assistance in ensuring your superannuation obligations are up to date, please reach out to your trusted advisor at PJT Accountants.