How to Get the Most Out the Superannuation Guarantee Amnesty (SGA)
On 6 March 2020 the government introduced a Superannuation Guarantee Amnesty (SGA).
The purpose of this amnesty is to give employers a chance to disclose and pay previously unpaid Super Guarantee Charges (SGCs), along with any nominal interest, which they owe to both past and current employees.
The reporting period for this amnesty covers the quarter(s) of 1 July 1992 to 31 March 2018.
Here are the benefits of the SGA, what the eligibility requirements are, and how to stay on top of your Super Guarantee obligations moving forward.
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Benefits of the Super Guarantee Amnesty (SGA)
If your application for this amnesty is successful, this means you won’t have to pay any of the following fees or penalties:
- Administration fees – normally $20 per employee, per quarter
- Part 7 penalty – up to 200% of the total SGC amount
- Nominal interest of 10%
- SG shortfall – A component of the SGC, calculated based on the employee’s salary and wages for the reporting period
Best of all? All SGC payments you make under the amnesty are entirely tax deductible.
To be eligible for the Superannuation Guarantee Amnesty you must meet the following criteria:
- You have not been informed by the ATO of their intention to examine your SG obligations for the quarter(s) in which you intend to disclose.
- You need to disclose a previously undisclosed SG shortfall for one or more employees.
- Your lodgement covers the quarter(s) starting from 1 July 1992 to 31 March 2018.
- Your SGA lodgement is received by the ATO no later than 7 September 2020
The Super Guarantee Amnesty and the Covid-19 Crisis
The ATO understands that the current economic crisis may have an economic impact on many business’ wishing to apply for the superannuation guarantee amnesty. For this very reason, the ATO are offering flexible payment plans to incentivise business’ wishing to apply to still come forward and make up their SG shortfalls. These arrangements include:
- flexible payment terms and amounts that the ATO will adjust if your economic circumstances change
- allow business’ the ability to extend the payment plan to beyond 7 September 2020 if required, the end of the amnesty period. However, only payments made by 7 September 2020 will be tax deductible.
Meet your SG obligations with Single Touch Payroll (STP)?
Whether you run a small or large business, you should already be compliant with the government’s Single Touch Payroll (STP) scheme that came into effect on 1 July 2018.
The purpose of the STP is to align your payroll functions with your businesses tax and super contributions. This means, every time you pay your employees – including their salaries and wages, PAYG withholding, and super contributions – you then send their payroll information to the ATO through STP-enabled software.
If you have the latest payroll and/or accounting software, then you should already be accustomed to the STP process. However, if your payroll and/or accounting software is out of date, then you could be at risk of not meeting your STP and Super Guarantee obligations.
With payroll software like E-Payoffice, you can easily input all the necessary data related to your employees, and submit your reports straight to the ATO for each pay cycle. Alternatively, our friendly and dedicated payroll staff can take care of the setup and reporting for you – giving you more time to focus on your business.
Aside from streamlining your STP obligations, you’ll also have peace of mind knowing that your employees are being paid the correct super contributions, so you don’t have to worry about harsh late fees or penalties.
Want to take the stress out of paying your employees? Take advantage of our online payroll software and outsourced payroll services for total peace of mind.
To request a FREE demo of E-Payoffice, contact us today.