Employer Super Obligations: an Opportunity to Save Money and Catch Up

Please note the legislation has not yet been passed through parliament, it is expected to receive assent in late June.

If you have unpaid employee Superannuation obligations you need to STOP and read the following. Recent headlines from the tax office have announced a super guarantee amnesty. “Amnesty?” you ask - only criminals require amnesty, right?

You might be surprised!

Current laws require your employer superannuation guarantee obligations to be paid (in a super stream compliant manner) 28 days after the end of each quarter at a minimum. You must pay your employees a superannuation guarantee of 9.5% of their ordinary earnings, if they earn a gross amount of $450 or more, in any given month.

Failure to comply with the super guarantee laws – including late payment of superannuation obligations, means you may have to pay the super guarantee charge. This charge is made up of:

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• Your super guarantee shortfall amounts
• Interest on the shortfall amount (10%) and
• An administration fee of $20 per employee, per quarter that the shortfall relates to.

The ATO currently requires any employer not meeting their obligations to lodge an SGC Statement Report and rectify the error by paying the outstanding amount. If you do not voluntarily engage with the ATO by lodging the required report, the ATO will potentially take a more aggressive approach in the collection of unpaid amounts, forcing compliance and administering harsh penalties.

If you are found non-compliant through an ATO audit (not by voluntary disclosure) you could be up for penalties of 200% of the SGC outstanding, plus general interest charges on the total outstanding amount.

Further to this, the SGC and late superannuation guarantee payments are not tax deductible.

Haven’t paid your obligations? Well it’s your lucky – amnesty!

The ATO have introduced a Super Guarantee Amnesty period (24/05/2018 – 23/05/2019). This is an opportunity for you to catch up on your obligations, without incurring any hefty fines and you can still claim a tax deduction for the late payments.

Don’t think you are behind? Perhaps this is a good time for a payroll audit to ensure you are paying according to the appropriate awards and that your superannuation calculations are correct. Don’t forget any contractors you pay may also meet the definition of an employee for super guarantee purposes: make sure you include these types of contractors in you payroll audit to ensure you capture the total SG shortfall.

To take advantage of the amnesty there are a couple of things you need to do.

1. Calculate your outstanding super guarantee – how much overdue super payable do you have?
2. Figure out the dates that the outstanding amount applies to (the shortfall must be for undeclared shortfalls for the period 01/07/1992 – 31/03/2018).
3. Disclose the outstanding amount to the Tax Commissioner using the SG Amnesty payment form (there are two forms to choose from) – you must report to the ATO first, if they find it before you, you aren’t eligible.
4. Pay the outstanding amount – which can be done in two ways
   1. Pay the amount in full
   2. Enter into a payment plan (you must meet your repayments or you will be removed from the amnesty program and the SGC will apply).

Under the amnesty, employers that are behind will have to pay:

• Super guarantee shortfall amounts
• Interest on the shortfall amount (10%)

This means you will not have to pay administration fees, penalties or general interest charges on these amounts.

Confused? We get it, it’s a heavily legislated area and reading about it is a sure cure for insomnia! If you aren’t sure about where you are with your super guarantee obligations, give us a call, we can perform an audit or show you where to start if you are behind. We can assist in filling out the correct forms, calculating SGC charges and help you to implement a plan to keep you up to date in the future.

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