The super guarantee amnesty is a one off chance for employers to catch up on missed employee super with reduced penalties.
Whether it was past cash flow problems or not understanding super guarantee rules, it is not too late to correct past happenings to protect your business from harsh penalties.
On the 6th of March 2020 an amnesty for unpaid super guarantees was introduced. By law, an employee is entitled to a super contribution of 9.5% of their gross wage to be paid by their employer, provided they earn more than $450 in a calendar month. The Guarantee will increase from 9.5% to 10% on July 1 2021, and will rise to 12% from 1 July 2025.
The Amnesty is to encourage employers who have not been meeting their super obligations to come forward and report without risk of increased fines and penalties, while also allowing deductions to reduce their tax liability. Employers will need to lodge their super guarantee amnesty using an approved form before the 7th of September 2020.
Where the disclosure results is a large liability, and because of the impacts of Coronavirus, the ATO may establish payment plans for employers. However, only payments made before 7 September will qualify as a tax deduction, and it is imperative that once negotiations are made with the ATO, the employer must meet these obligations. Failure to make payment will result in disqualification from the amnesty. Penalties and interest will then apply.
It may seem daunting, or more convenient, to roll the dice and not look to resolve super liabilities for your employees. However, the ATO now has a greater ability to identify wrong doings, as a result of greater reporting requirements, and this significantly increases the chances of employers getting caught and being exposed to large penalties.
Pro tip: Stay ahead of potential penalties by checking your super guarantee clearing account and ensuring the payments are being cleared monthly.
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Author: Lachlan Hunn