Take advantage of the ATO's SG Amnesty to back pay any shortfalls to SG payments.
Employers have until 7 September 2020 to self-report to the Australian Tax Office (ATO) and back pay any superannuation guarantee (SG) shortfall or face harsher penalties under new legislation.
The SG Amnesty is there to incentivise eligible employers to disclose any underpaid SG amounts to the ATO.
Whilst this may not be considered a top priority at present, as many businesses are experiencing conflicting priorities to remain viable during the global pandemic, now is a rare opportunity to come forward to disclose any shortfalls in SG payments.
The SG shortfalls under this Amnesty would apply to any quarter between 1 July 1992 and 31 March 2018, as long as these periods have not yet been questioned by the ATO.
The Amnesty provides for employers to disclose and pay unpaid (SGC), including nominal interest, without being liable for the administration fee component of the SGC or the Part 7 penalty. Employers will also be able to claim a tax deduction for the SGC. Special payment arrangements may be entered into for employers if they have been adversely affected by COVID-19.
The passing of the SG Amnesty coupled with real time reporting via mandatory single-touch payroll (STP) allows the ATO to see if superannuation guarantee payments are being made, nearly in real time.
Unlike many other employee entitlements, there is no limitation period on the obligation to pay superannuation and the obligation to back pay SG does not expire.
It is recommended all employers, including those who pay above the SGC rates, utilise this opportunity to undertake a full review of superannuation compliance to check for any current or historical non-compliance.
As significant penalties are in place for companies who underpay SG liabilities, we suggest that careful consideration should be given to assessing if your business should apply.
To participate in the Amnesty, applications must be made by 7 September 2020. Instructions on how to apply are available here.
Should you have any queries, please do not hesitate to contact us.