On 18 September 2019, the Federal Government has announced the re-introduction of the once-off amnesty which is currently before the Parliament to encourage employers to voluntary disclose past non-compliance. This would apply to all employers who might have fallen behind in its payments or might have been underpaying superannuation guarantee for its employees.
If the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 legislation is enacted the amnesty period will cover the superannuation contributions in the period from 1 July 1992 to 31 March 2018. The Government’s intention is for the amnesty to apply since the start of the original amnesty period 24 May 2018 until six months after the legislation passes the Parliament.
Employers who take an advantage of the proposed amnesty would be able to claim:
- the removal of the administrative penalty of the Superannuation Guarantee (SG) charge of AUD20 per employee per quarter
- ability to claim a tax deduction for the payment of underpaid SG during the amnesty period
- apply for a full reduction of penalties that may otherwise apply.
The ability to deduct the SG charge and the reduction in penalties under the amnesty could be significant for employers who might have underpaid superannuation guarantee for their employees. The employers will only be liable for the SG shortfall and a nominal interest component.
Given the proposed advantages of the amnesty, employers should take the initiative of this incentive and conduct the review of their payroll calculations and current processes in place to ensure that their employees are paid in accordance with their entitlements or engage an external tax advisor to assist with the superannuation review.
The amnesty will only apply to voluntary disclosures and would not apply to the audits that might have already been conducted by the ATO.
Our A&A tax team would be happy to assist with the review of your remuneration structure and payroll calculations.