Employers now have amnesty until May 2019 to voluntarily disclose any of their outstanding superannuation guarantee liabilities without penalty.
Currently, employers are responsible for remitting at least 9.5% of their employees’ ordinary income to a superannuation fund on behalf of their employees. The remitted superannuation is called the superannuation guarantee. The employer is eligible for a deduction on the superannuation guarantee paid.
However, if the employer fails to remit the superannuation guarantee within 28 days of the end of a quarter, then significant ramifications apply. The employer becomes liable for:
- a penalty, called a superannuation guarantee charge (comprising of the shortfall amount and interest on the shortfall amount at a rate of 10% per annum);
- an administrative penalty of $20 for each employee;
- penalties of up to 200% of the shortfall;
- general interest charge; and
- the employer would not be eligible for a deduction for paying any of the above penalties.
The amnesty gives employers an opportunity to voluntarily disclose any superannuation shortfall without penalty for the period commencing on 1 July 1992 to 31 March 2018. It provides that, upon voluntary disclosure, employers will:
- be liable to pay the shortfall amount;
- be liable for nominal interest; and
- be eligible for deductions on the shortfall amount.
Employers should take advantage of this amnesty as it is a good opportunity to check that their superannuation obligations are up to date before harsher penalties for non-compliance are introduced. The Australian Taxation Office may accept payment arrangements so employers could pay any shortfall amount in instalments.
If you would like to understand how you can take part in the amnesty, please contact Gabrielle Bourke or Daniel Romano.