Superannuation Amnesty: What are your options as an employer?
You may have heard that the Australian Government has provided the ATO with extra tools to enforce superannuation compliance, so that employees are paid any entitlements they are owed in full.
Employers have a 12-month superannuation amnesty period, which started on 24th May, 2018. During this period, you must pay up any outstanding superannuation amounts owed from 1st July, 1992 to 31st March, 2018.
Amounts owed from 1st April, 2018 are not included in this amnesty.
You will not incur any penalties for unpaid superannuation during the amnesty period but there are severe penalties if the ATO audits you and finds undeclared unpaid superannuation.
So it’s best to understand in full what your obligations and options are…
How high are non-compliance rates with superannuation?
According to an Australian government minister, in 2014/15 the ATO estimates about $2.85 billion of superannuation went unpaid.
While this would indicate a 95 percent compliance rate, the government is unwilling to tolerate any non-compliance.
Understandably, the preference is for employers to pay all of what they owe, including the nominal interest, which has a high rate.
What are the penalties after the superannuation amnesty is over?
If you do not pay up the superannuation you owe during the superannuation amnesty period, penalties will apply in the future.
Non-complying employers will see at least a 50 percent charge added to the superannuation they owe.
Moreover, the superannuation amnesty period does not protect you from being investigated. The ATO will continue to seek out employers who do not comply during this period.
What if you cannot pay what you owe?
If you have superannuation back payments to make and you can pay in full, fill out a form and electronically submit it through the business portal to the ATO.
If you owe superannuation and are unable to pay in full, talk to the ATO. You will need to lodge a completed payment form to the ATO and they will get in touch with you to arrange a payment plan.
Superannuation compliance: What are the benefits to you?
It’s best to declare any superannuation not paid to workers before an audit is conducted because:
- You can claim deductions for catch-up payments made during the 12-month amnesty period.
- You will not be held liable for the administration component and penalties that would otherwise arise due to late superannuation payments.
What if you’re facing an audit by the ATO?
If your superannuation payments for any period are subject to an audit, the amnesty will not apply for that period.
The ATO can initiate a review at any time, especially if employees raise a complaint.
If you’ve got questions about the superannuation amnesty, audits, or anything else about superannuation payments, talk to an Ascent Accountants superannuation adviser in Perth.
Contact us here to schedule your consultation.