RSM Australia

Still Time to Act - Superannuation Guarantee Amnesty

Tax Insights

Time is running out to make any voluntary employer superannuation contributions to the ATO, under the Government’s Superannuation Guarantee Amnesty. The deadline for the submission is 7 September 2020, with no further extension possible, under the legislation.

Superannuation Guarantee AmnestyThe complexities surrounding employee remuneration has become evident in recent years and calculating the appropriate level of employer superannuation contributions is no exception. Before the amnesty period expires, employers should take the opportunity to ensure all contributions have been made, and review the payroll classification to ensure the various components of the payroll are correctly classified as “Ordinary Times Earnings” (OTE). If incorrect classifications have been made, now is the time to confront the mistakes and make a voluntary disclosure to the ATO under the amnesty.

Some common mistakes include:

  • Not treating annual leave loading as OTE
  • Appropriate classification of allowances paid to employees
  • Not making superannuation contributions on behalf of independent contractors (not operating through an entity) who are paid for their labour.   

Under the amnesty, an employer may report any unpaid superannuation guarantee shortfall, without the imposition of the administration charge ($20 per employee per quarter), penalties, and the ability to claim a tax deduction for the shortfall. Post the amnesty period, the penalties will be severe with a 200% penalty on top of the SGC shortfall, administration charge, and non-deductibility of the costs. The ATO has a much clearer view of non-compliant employers, with real time reporting of payroll since the introduction of Single Touch Payroll (STP).

Amnesty period

superannuation guarantee amnestyThe voluntary disclosure under the amnesty is available to all employers, provided they have not been subject to an ATO investigation in respect of the unreported superannuation. It covers the period 1 July 1992 until the quarter ended 31 March 2018. Unlike other taxes, any shortfall of superannuation may extend back as far as 1 July 1992 and is not limited to the usual 4-year window.  

Taking action now could save an employer significant tax costs, as well as any potential embarrassment. Remember the deadline is 7 September 2020, so we recommend acting now while there is still time.


HOW CAN RSM HELP?

Should you require further information in relation to the Superannuation Guarantee Amnesty, please reach out to your RSM Tax specialist to seek professional advice.

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