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Amnesty for businesses with unpaid superannuation

Please note – Since this post was first published on 30 May 2018, the Australian Taxation Office (ATO) has advised that this was a proposed amnesty.

At the conclusion of parliamentary sittings in February 2019 the associated legislation had not been passed. Employers can still choose to apply under the proposed amnesty, and when it does pass into law the benefits will be applied retrospectively by the ATO.

Small business owners have been given a 12-month amnesty to get up-to-date on any unpaid superannuation payments they have for current or past employees.

On 24 May 2018 the Minister for Revenue and Financial Services announced that a one-off proposed 12-month amnesty has been introduced as part of the Government’s package of reforms to protect workers’ superannuation entitlements.

The Australian Taxation Office (ATO) estimates about $2.85 billion in superannuation guarantee (SG) payments went unpaid in 2014-2015.

Should you voluntarily disclose previously undeclared superannuation guarantee (SG) payments, the minimum superannuation paid to eligible employees each quarter, during the amnesty period, and before the commencement of your SG audit, you will:

  • not be liable for administration and penalties that apply to late SG payments
  • be able to claim a deduction for catch-up payments made in the 12-month period

To take advantages of the amnesty, businesses will need to pay staff their outstanding superannuation in full, plus interest calculated at 10 per cent a year.

Those businesses who fail to take advantage of the amnesty will face higher penalties when caught, of at least 50 per cent of the money owed, on top of the unpaid super.

Under the amnesty, businesses are required to calculate the SG charge on salary and wages, not ordinary time earnings, and must pay the nominal interest component calculated at 10 per cent per annum.

Tip: use the ATO’s superannuation guarantee charge statement and calculator tool to calculate your SGC amount and prepare your SGC statement.

More information

Find out more on the superannuation guarantee amnesty.

If you have any questions on handling superannuation for your business, speak to your accountant or contact our free small business advisory service.

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