Are you running behind on employee superannuation payments? If so, you might be in luck.

Unpaid super guarantee (SG) payments has emerged as a huge issue in recent times. The ATO has estimated $2.8 billion goes unpaid annually and submissions to Parliament by Industry Super Australia put the figure as high as $17 billion over the past seven years.

In some cases the underpayment can be unintentional, with mistakes made when trying to figure out payments for contractors, people working odd hours, and interpreting complex Modern Awards. However, small businesses encountering cash flow problems are especially ‘vulnerable’ to the issue.

In the hope of recovering some of this shortfall, Kelly O’Dwyer, Minister for Revenue and Financial Services, has announced a Superannuation Guarantee Amnesty – a one-off opportunity for employers to self-correct past SG non-compliance without penalty.

Here’s how it works

If you’ve missed or underpaid any employee superannuation payments between 1 July 1992 to 31 March 2018, you now have until May 23, 2019 to declare your shortfall and take steps to pay the missing amounts.

If you do this voluntarily you will avoid late payment penalties. You will still have to pay nominal interest but the ATO is letting you off the hook for the administration fees. You can also claim a deduction for catch-up payments made in the amnesty period.

You have options in dealing with the debt:

  • Pay the full amount owed directly to your employee’s super fund, then fill out a payment form and submit it to the ATO through their online business portal.
  • If you can’t pay the full amount you can arrange a payment plan with the ATO.

What happens if you miss the Amnesty?

You don’t want to do this!

Employers who fail to take advantage of the amnesty and report any non-compliance, will face higher penalties when they are eventually identified.

New legislation will allow the ATO to seek court-imposed penalties for employers who do not meet their superannuation guarantee liabilities, including up to 12 months’ jail in extreme cases.

For most businesses, addressing non-compliance during the amnesty period will reduce stress, minimise risk of future penalties, and establish a plan to get back on track. All while avoiding potential fines of 50 – 200% of the super owed (or worse…).

What about going forward?

The ATO’s data matching is improving all the time, and whether intentional or not, non-compliance is becoming easier to detect.

Depending on the size of your business, within the next 12 months you will likely be required to use a ‘Single Touch Payroll’ system. When that happens, you will report payments such as wages and superannuation information every time you pay your employees. This means the ATO will know when you are behind in your payments and you will need to act quickly to avoid penalties.

Superannuation funds will be required to report ­employer contributions at least monthly to the ATO, allowing for the earlier identification of non-payment.

And Year to Date superannuation information will also be available to your employees within a few days of each pay run.

Staying on top of your payroll is going to become increasingly important to avoid employee relationship issues, auditing and penalties.

Do you owe super (or think you might)?

We can help you determine if you are non-compliant, negotiate with the ATO to reduce penalties and initiate repayment plans, as well as help you get on top of your payroll to avoid issues in the future.

The team at Business Wise are experts in this field, so if you’re behind on any payroll issues, we can help you fix things up. Take advantage of the amnesty by acting now – call us on 4922 6128 for a confidential and obligation free consultation.

Business Wise
The team at Business Wise don't just do bookkeeping and accounting - we believe that successful businesses are those that are informed, proactive and open to change, and we want to help you on your journey to success.