What is the superannuation guarantee amnesty?
The Commonwealth Government has proposed a superannuation guarantee charge amnesty. The law creating the amnesty has not yet been passed by Parliament.
Once the amnesty becomes law, an employer who voluntarily discloses an underpayment of superannuation to the Australian Taxation Office between 24 May 2018 and 23 May 2019 will not be liable to pay the administration fee and penalties that employers usually have to pay if they pay superannuation late.
Why should I use it?
We often come across employers who have failed to pay superannuation to their employees and contractors. Usually, superannuation underpayments involve honest mistakes that the employer brings to the attention of the ATO as soon as they are discovered.
If an employer discloses such an underpayment, it will be liable to pay the guarantee charge, general and nominal interest charges, penalties and administration fees. The penalties and administration fees can be significant, particularly for small businesses. By waiving these, the amnesty makes it much cheaper to
When should I act?
You should not act yet. The legislation implementing the amnesty has not yet been passed by Parliament. Even though the legislation is intended to apply retrospectively from 24 May 2018, employers may not be protected by the amnesty if they disclose now and the legislation is not passed.
Do I have to pay superannuation to independent contractors?
Many employers think that they do not need to pay superannuation to independent contractors. This is not always true. An employer needs to pay superannuation to an independent contractor if that independent contractor is a sole trader who primarily provides personal labour or services to the employer and does not or cannot subcontract their work to others.
How do I act?
The ATO has developed a special form that employers can use to make use of the amnesty. It is available on its website.