Superannuation Guarantee Amnesty

August 5, 2020

Superannuation guarantee amnesty

A super guarantee amnesty was introduced on 6 March 2020. Employers participating in the amnesty need to apply by 7 September 2020.

If you’re affected by economic changes due to COVID-19, the ATO can help.

The ATO understand that you may wish to apply for the super guarantee amnesty (the amnesty) and may be concerned that, as a result of COVID-19, your circumstances may change and you won’t be able to pay the liability.

If you want to participate in the amnesty, the law requires you to apply by 7 September 2020.

However, the ATO will work with you to establish a payment plan that is flexible to help you to continue making payments. These arrangements include:

  • flexible payment terms and amounts which we will adjust if your circumstances change
  • the ability to extend the payment plan to beyond 7 September 2020, the end of the amnesty period. However, only payments made by 7 September 2020 will be deductible.

Why should you act now?

The ATO’s ability to identify underpaid SG has increased through greater data visibility as a result of more frequent reporting requirements by super funds and employers.

They are increasingly using this capability to identify employers that have underpaid SG.

If they identify underpaid SG amounts for a quarter that was covered by the amnesty that you have not disclosed, in addition to the SG shortfall you will also be liable for:

  • the administration component ($20 per employee per quarter)
  • up to a 200% Part 7 penalty (at minimum 100% if remission is applicable)
  • nominal interest (10%)
  • the general interest charge (GIC).

In addition, you will not be able to claim a tax deduction for the SGC paid.

Read more about the super guarantee amnesty on the ATOs website.

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