Understanding the Superannuation Guarantee Amnesty

Back on the 6th March the government introduced the superannuation guarantee (SG) amnesty. This amnesty provides employers six months to disclose, lodge and pay any unpaid SG amounts for their employees without having to pay any admin fees or other penalties.

How does this amnesty help my business?

This six month period allows you the time to audit your records and make sure that you have no SG shortage for any past or present employees. You will need to check records as early as the 1st July 1992 for any SG shortfalls and make sure that they are declared and paid by the 7th September 2020.

What are the costs to my business?

If you find any unpaid SG amounts for past or present employees you must pay the following by the 7th September:

  • the SG shortfall
  • nominal interest (10%)

Fortunately, payments made before the 7th September are tax deductible.

However, once this amnesty ends the financial penalty will be significant. If you are audited after the 7th September and are found to have underpaid employees, in addition to the above, you will also be required to pay:

  • an administration fee of $20 per employee per quarter
  • the Part 7 penalty (up to 200% of the super guarantee charge liability)

What if the financial position of my business has changed due to COVID-19?

Back in early March this amnesty was welcome news. However, since then, COVID-19 has had a significant financial impact on numerous businesses, causing apprehension and concern for many. Although there is no change to the amnesty deadline, the government is allowing payment plans to be established for those who need it.

Plans may include:

  • flexible payment terms and amounts (that can be adjusted if circumstances change)
  • the ability to extend the plan beyond the 7th September (payments after this date won’t be tax deductible)

How do I apply for the amnesty?

The SG amnesty form needs to be lodged for each quarter there is a shortfall. However, that’s where the team at CBS can help. As certified bookkeepers and registered BAS agent we will help you with the paperwork, including establishing payment plans, and make sure applications and payments are lodged by the September deadline.

Talk to us today and let us help ease your workload.

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