With an estimated $5.6 billion in super payments not made annually, employers are being encouraged to resolve outstanding super commitments.
The recent introduction of the long-awaited superannuation guarantee (SG) amnesty bill is now giving employers a ‘once-only’ opportunity to set things right before tough penalties apply.
What does this mean?
Under SG laws, employers are required to contribute at least 9.5% of workers’ earnings to a superannuation fund or retirement savings account.
The Superannuation Guarantee (SG) is the official term for compulsory super contributions made by Australian employers on behalf of full-time, part-time or casual employees who:
– earn more than $450 before tax in a calendar month
– work in Australia (including temporary residents and working holidaymakers)
– are over the age of 18 (employees under 18 must work more than 30 hours per week to qualify for the SG payment).
Note, some of your contractors may be entitled to super.
When was the last time you checked you were meeting all of your super obligations?
As an employer, SG contributions are tax-deductible and must be paid at least four times a year in line with the quarterly due dates.
If you don’t pay on time, a superannuation guarantee charge (SGC) will be applied and is not tax-deductible.
The SG is a legal compliance obligation for all employers in Australia. Failure to comply will attract significant penalties from the ATO, so it pays to understand your obligations.
Is the amnesty for you?
The SG amnesty provides for a one-off amnesty to encourage employers to self-correct historical SG non-compliance dating from 1 July 1992 to 31 March 2018.
To use the amnesty, employers must still pay all that is owing to their employees, including the high rate of interest.
The amnesty period will start from 24 May 2018 and end six months from the date it receives royal assent.
The new legislation will also impose minimum penalties on employers who fail to come forward during the amnesty period by limiting the commissioner’s ability to remit penalties below 100 per cent of the amount of SGC payable.
Are you paying your employee’s super the right way?
Pay the SuperStream way – where both payments and data are sent electronically in a standard format.
You may be able to use the free Small Business Super Clearing House to distribute payments to your employees’ super funds.
Single Touch Payroll is the next step in streamlining your payroll reporting.
It’ll pay to remember that throughout the amnesty period the ATO will continue to undertake its usual audit and enforcement activity against employers for historical obligations they do not own up to voluntarily.
Use your time wisely and let us help you take this opportunity to ensure your super payments are compliant.
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