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  • Superannuation guarantee amnesty

    A superannuation guarantee amnesty was introduced on 6 March 2020. Employers participating in the amnesty need to apply by 7 September 2020. If you're affected by economic changes due to COVID-19, we can help.

    Find out about:

    COVID-19 effects

    We understand you may wish to apply for the superannuation guarantee amnesty (the amnesty) and may be concerned that, as a result of COVID-19, your circumstances may change and you will not be able to pay the liability.

    If you want to participate in the amnesty, the law requires you to apply by 7 September 2020.

    However, we will work with you to establish a payment plan that is flexible to help you to continue making payments. These arrangements include:

    • flexible payment terms and amounts which we will adjust if your circumstances change
    • the ability to extend the payment plan to beyond 7 September 2020, the end of the amnesty period. However, only payments made by 7 September 2020 will be deductible.

    If, after we work with you, you are unable to maintain payments, the law requires us to disqualify you from the amnesty and remove the amnesty benefits. However:

    • the disqualification will only apply to any unpaid quarters
    • we will advise you which quarters are unpaid – for these quarters we will re-apply the administration component of $20 per employee included in the disqualified quarter
    • we will also take your circumstances into account when deciding whether a Part 7 penalty should be applied to your disclosure – a review of your circumstances may result in the Part 7 penalty being reduced to nil.

    We also recognise that for some employers, applying for the amnesty will result in them receiving a refund. In particular:

    • for those employers who are eligible and lodged a super guarantee charge (SGC) statement between 24 May 2018 and 6 March 2020, we are amending your returns as quickly as possible so that any refunds can be paid to you
    • if you have made payments of SGC or contributions to employee super funds in 2017–18 or 2018–19 that are eligible for income tax deductions, you should include this deduction in your tax return for the relevant year. Once we have amended your return we will pay any refund due as soon as possible. Generally this will be within 14 days.

    To allow us to issue your refunds in a timely manner make sure that your financial institution account details are updated and correct. You can do this via the Business Portal or by phoning us on 13 28 66.

    We acknowledge the difficult times the community has been experiencing recently with COVID-19 and the 2019–20 bushfires. However, the law does not allow us to vary the due date for lodgment of an amnesty application. If you’re a small or medium business and you need further assistance managing your tax and super obligations, contact our Emergency Support Infoline on 1800 806 218 or speak with a trusted tax advisor.

    To find out more about the support available to you, your business, or your clients visit:

    Super guarantee amnesty

    Watch:

    Media: [Super guarantee amnesty]
    https://tv.ato.gov.au/ato-tv/media?v=bd1bdiun3unsbfExternal Link (Duration: 00:39)

    On 6 March 2020 the government introduced a superannuation guarantee (SG) amnesty (the amnesty). The amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018. Eligible disclosures will not incur the administration component ($20 per employee per quarter) or Part 7 penalty.

    In addition, payments of SGC made to the ATO after 24 May 2018 and before 11:59 PM 7 September 2020 will be tax deductible.

    Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again – see Disclosures of unpaid SG between 24 May 2018 and 6 March 2020.

    Employers who come forward from 6 March 2020 need to apply for the amnesty by 7 September 2020.

    The ATO will continue to conduct reviews and audits to identify employers not paying their employees SG. If we identify these employers before they come forward, they will not be eligible for the benefits of the amnesty. They will also be required to pay:

    • SG shortfall
    • nominal interest (10%)
    • administration component ($20 per employee per quarter)
    • Part 7 penalty (up to 200% of the SGC).

    In addition, payments of the SGC won't be tax deductible.

    Paying super is an important part of being an employer. If you're not eligible for the amnesty, or you have unpaid super for quarters that are not eligible, you must still lodge an SGC statement.

    See also:

    Why you should act now

    The ATO's ability to identify underpaid SG has increased through greater data visibility as a result of more frequent reporting requirements by super funds and employers.

    We are increasingly using this capability to identify employers that have underpaid SG.

    If we identify underpaid SG amounts for a quarter that was covered by the amnesty that you have not disclosed, in addition to the SG shortfall you will also be liable for:

    • the administration component ($20 per employee per quarter)
    • up to a 200% Part 7 penalty (at minimum 100% if remission is applicable)
    • nominal interest (10%)
    • the general interest charge (GIC).

    In addition, you will not be able to claim a tax deduction for the SGC paid.

    Example: Failure to disclose during SG amnesty

    Ben owns a salon employing five staff. He sometimes has difficulty paying his employees their SG entitlements. Ben hears about the SG amnesty, but decides he doesn’t have time to work out what he hasn’t paid and will sort it out later.

    The ATO uses payment data available from super funds and identifies that Ben hasn’t met his SG obligations for all four quarters in 2017.

    On 14 October 2020 Ben receives a letter from the ATO telling him they have commenced an audit. They request evidence of super payment for the quarters identified.

    Ben goes through his records and discovers he has an SG shortfall. The total SGC payable is $12,800, which includes the SG shortfall, interest and administration component.

    Ben remembers the amnesty and phones the ATO to see if he is eligible. The ATO tells him that the amnesty ended on 7 September 2020.

    Because Ben didn’t disclose the shortfall during the amnesty period, he has to pay the full SGC amount of $12,800, this includes $400 for the administration component (five staff × $20 × four quarters). The ATO also applies the minimum Part 7 penalty of 100% after remitting it from 200%, adding a further $12,800.

    The total amount Ben owes the ATO is $25,600. Ben cannot claim a tax deduction for the SGC of $12,800 or the additional penalty of $12,800.

    If Ben had reviewed his records and disclosed the underpayments within the amnesty period he would not have incurred the $12,800 penalty and would have avoided the $400 administration component. In addition, he would have been able to claim a tax deduction for the SGC paid before 7 September 2020.

    End of example

    Next step:

    Eligibility for the amnesty

    To be eligible for the amnesty you must meet and fulfil all the following criteria. You must:

    • have not been informed the ATO is examining or intends to examine your SG obligation for the quarter(s) your disclosure relates to
    • disclose an SG shortfall for an employee that you haven’t already disclosed to us (or disclose additional amounts of SG shortfall for a quarter previously disclosed)
    • disclose for quarter(s) starting from 1 July 1992 to 31 March 2018.
    • lodge your completed SG amnesty form with the ATO so we receive it no later than 7 September 2020.

    Note: You will also need to pay the amount owing to the ATO or set up a payment plan after you lodge the SG amnesty form. You need to do this to avoid being disqualified and losing the benefits of the amnesty.

    Example: Eligibility for the amnesty

    Chloe owns a café with five staff. Going through her records she finds she has not made SG payments for her employees for four quarters in the 2015–16 financial year. Realising the error Chloe completes and lodges the SG amnesty forms for these quarters.

    Chloe is eligible to apply for the benefits of the SG amnesty because:

    • she has not been informed that the ATO is examining or intends to examine her SG obligations for the quarters the disclosures relate to
    • she has not previously disclosed to the ATO for the employees listed on the SG amnesty forms and for the quarters the disclosures relate to
    • the disclosures are for quarters that are eligible for the amnesty, being a quarter between 1 July 1992 to and including the quarter ending 31 March 2018
    • the ATO received her SG amnesty forms before 7 September 2020.
    End of example

    Benefits of the amnesty

    If you qualify for the amnesty, you:

    • will be able to claim a tax deduction for the SGC amounts you pay to the ATO by 7 September 2020
    • won’t be required to pay the administration component ($20 per employee per quarter) of the super guarantee charge (SGC)
    • won’t have a Part 7 penalty applied.

    Note: If you have already been assessed for a quarter, you can amend a previously disclosed SG shortfall. However, only newly-disclosed, additional amounts will be considered for the benefits of the amnesty.

    Your professional advisor can provide further advice on participating in the amnesty, based upon your particular circumstances.

    Disclosures of unpaid SG between 24 May 2018 and 6 March 2020

    If you previously disclosed unpaid SG to the ATO in anticipation of the SG amnesty, you don't need to lodge again or apply on the SG amnesty form.

    The ATO will review all disclosures received between 24 May 2018 and 6 March 2020.

    If your disclosure is eligible we will apply the amnesty law and advise you of your eligibility.

    For eligible disclosures we will issue notices of amended assessment to reflect that the benefits of the amnesty have been applied retrospectively and the administration component has been removed. A notice will issue for every quarter where we have removed the administration component.

    These notices do not reflect payments made. We will also issue a Statement of Account which will reflect the correct account balance.

    If you haven’t paid or set up a payment plan, you should take action now to avoid being disqualified and losing the benefits of the amnesty.

    You should make sure that your financial institution account details are updated and correct via the Business Portal, or by phoning us on 13 28 66. If you are eligible for a refund of any amounts previously applied to your account, this will allow us to issue your refund in a timely manner.

    Example: Disclosing unpaid SG between 24 May 2018 and 6 March 2020

    Graham is a director of a construction company. As part of updating his payroll system in July 2018, Graham discovered that the company had underpaid some of their workers SG for several years, going back to 2012.

    Graham then contacted his tax agent and worked with them to prepare and lodge SGC statements for a total of 24 quarters. In August 2018 Graham entered into a payment arrangement to pay the SGC to the ATO in instalments and has been making regular payments.

    Graham hears about the SG amnesty and asks his tax agent if he is eligible. Graham’s tax agent explains that he is eligible because the disclosures:

    • relate to quarters before 31 March 2018
    • were made after 24 May 2018
    • were not as a result of an examination by the ATO.

    The ATO identifies that Graham made an eligible disclosure and notifies him in writing that he is eligible. The ATO also amends Graham's SGC liability to remove the administration component. As Graham had checked and updated his financial institution details through the Business Portal, he will receive any refund of the administration component in a timely manner.

    As long as Graham adheres to his payment plan, he will remain eligible for the benefits of the amnesty. This includes being able to claim a tax deduction for payments made by 7 September 2020.

    End of example

    How to apply for the amnesty

    To apply for the amnesty, you must:

    • download the approved SG amnesty form (XLS 613KB)This link will download a file
    • complete one form per quarter using the instructions contained in the form
    • check the amounts are correct and there are no errors on your form
    • complete the declaration to confirm you are applying for the amnesty
    • save the form as an .xls file type.

    You must keep records for five years after your disclosure that identifies the employees and amounts of SGC you have disclosed.

    We recognise that your disclosure may relate to a year in excess of these general record keeping requirements for businesses. In such cases, your disclosure can be based on a range of information sources.

    Note: SGC statements lodged after 5 March 2020 won’t be considered for the amnesty. If you don't use the approved SG amnesty form or you don't save it as an .xls file type, your application may not be accepted.

    Example: Disclosures older than the last five years

    Zhang has run a successful catering company for over 20 years. He has had many employees over the 20 years, some turning over quickly whilst others are long term. Because he has employed so many individuals, he is unsure if he has always correctly paid the correct super entitlements to all of his employees. He decides to review his records.

    Zhang has heard about the SG amnesty and phones the ATO. He wants to know how far back he needs to go, particularly as he has changed payroll systems a few times over the years.

    The ATO tells Zhang to review his payments for at least the last five years, as the law requires these records to be kept. They advise that if he has records older than that he should take the opportunity to correct any past underpayments that he can identify. This may include using bank statements, pay slips, and award documents as references.

    This is because even if employers can't find it, historical information provided by current or former employees may result in an audit on any quarter from 1 July 1992. The ATO is not restricted by a time limit to make a SGC assessment.

    End of example

    Next steps:

    Lodge your SG amnesty form by secure mail

    Do not use the SGC calculator in the Business Portal if you want to apply for the amnesty.

    To ensure the correct calculation of the amount of SGC you owe and efficient processing of your amnesty application you need to:

    Your professional advisor can provide further advice on participating in the amnesty, based upon your particular circumstances.

    Receive confirmation of your eligibility

    If you are eligible for the amnesty, you:

    • will be informed in writing within 14 business days of us receiving your application
    • won’t be charged the administration component ($20 per employee per quarter)
    • won’t be charged part 7 penalty
    • will need to pay or set up a payment plan to pay the total amount of SGC you owe. We will send you your payment reference number (PRN).

    You will be eligible to claim a tax deduction for any payments you make between 24 May 2018 and 7 September 2020 toward the amount of SGC eligible for the amnesty.

    Payments of SGC made after 7 September 2020 won’t be eligible as a tax deduction.

    Pay in full or set up a payment plan

    You must pay the amount of SGC owing to avoid losing the benefits of the amnesty.

    If you have paid directly to a super fund and have not lodged the amnesty form, you must claim a late payment offset.

    If you lodge your amnesty forms to the ATO, you must pay us. Don’t pay the amount of SGC owing direct to your employees’ funds or to a clearing house.

    It’s important you act quickly to either:

    • pay the amount owing in full
    • set up a payment plan for the amount of SGC you owe.

    You will need to know your PRN. You can find your PRN on any SGC related notice or SGC payment slip you have previously received from us for the same ABN.

    If you don’t know your PRN you can get it from us by phoning 1800 815 886 between 8.00am to 6.00pm, Monday to Friday. Tell us that you need to request a PRN for your SG employer role. Make sure you have your ABN and contact details handy.

    Once you have your PRN refer to How to pay for details on how to make payment.

    Note: Only amounts paid toward the SGC identified as eligible for the amnesty and paid before 7 September 2020 will be eligible as a tax deduction.

    Example 1: Paying the ATO in full

    Sue lodges SG amnesty forms for six quarters after 6 March 2020. The ATO tells her she is eligible for the amnesty for all quarters disclosed.

    Sue gets her PRN from the ATO and pays the SGC to the ATO in full.

    As a result Sue remains eligible for the benefits of the amnesty. While she still needs to pay the SG shortfall and interest, she is not charged the administration component and is not subject to a Part 7 penalty. Sue can claim a tax deduction for the payments she made before 7 September 2020.

    End of example

     

    Example 2: Setting up and meeting the conditions of a payment plan

    Bob lodges SG amnesty forms for four quarters after 6 March 2020. The ATO tells him he is eligible for the SG amnesty. Bob’s total shortfall for all of the quarters is $30,000.

    Bob is unable to pay the entire $30,000 at the time of lodging the SG amnesty forms. He goes to the ATO website to set up a payment plan. Bob enters into a payment plan to make equal monthly payments to pay the SGC amounts due.

    Bob makes all the required payments under the conditions of the payment plan. He therefore remains eligible for the benefits of the amnesty. Bob can claim a tax deduction for the payments he makes before 7 September 2020.

    End of example

    See also:

    Avoid losing the benefits of the amnesty

    The law has introduced conditions that apply to the ongoing eligibility of the amnesty.

    After we advise you are eligible for the amnesty, you will be disqualified and will lose the benefits of the amnesty if you don’t:

    • pay the SGC amount payable, or
    • enter into a payment plan to pay the amount of SGC payable to the ATO, and
    • comply with the terms of your payment plan for the SGC amount owing.

    If your disclosure is disqualified from the amnesty, we will:

    • notify you in writing of the quarter or quarters you have been disqualified for
    • charge you the administration component ($20 per employee per quarter) of the SGC
    • apply PS LA 2019/1 to determine whether you should receive a Part 7 penalty
    • issue you a notice of amended assessment with the increased amount owing
    • continue to work with you through our debt processes to collect the amount outstanding.

    In addition, any payments you make for that quarter will not be tax deductible. This is even if you make them before 7 September 2020.

    If you are disqualified from the amnesty after having already lodged your tax return and claimed a tax deduction, you will need to amend your tax return.

    Example: SG amnesty payment plan

    Lucia applies for the SG amnesty for five quarters from 1 January 2016 to 31 March 2017. The ATO tell her she is eligible for the amnesty for all quarters. The amount of SG shortfall and nominal interest she owes is $500 per quarter – a total of $2,500.

    Lucia sets up a payment plan to pay $500 a month for five months.

    Lucia pays two instalments of $500 each ($1,000 in total) which cover the amounts owing for the quarters 1 January 2016 to 30 June 2016.

    However, she fails to pay the next instalment in her payment plan. She doesn’t renegotiate her payment plan with the ATO. She also misses future instalments.

    As a result the disclosures and instalments Lucia pays for, the quarters 1 January 2016 to 30 June 2016, remain eligible for the amnesty. However, the disclosures for 1 July 2016 to 31 March 2017 are disqualified from the amnesty.

    The ATO amends the assessments to add the administration component to the quarters disqualified under the amnesty and informs Lucia in writing. Part 7 penalties are also applied to the disqualified quarters and because the disclosure was made before the end of the amnesty period without prompt by the ATO, the penalty can be remitted below 100%.

    The ATO continues to work with Lucia through its debt collection processes to collect the remaining amount of SGC she owes to her employees. This is $1,500 unpaid SG plus the administrative component and general interest charge.

    End of example

    Applications not eligible for the amnesty

    If we determine your application is not eligible for the amnesty you:

    • will be notified in writing about why your disclosure was not eligible
    • will be charged the administration component ($20 per employee per quarter) of the super guarantee charge (SGC)
    • may be charged a Part 7 penalty. A minimum 100% penalty will apply after the amnesty ends if an assessment is made without disclosure or the disclosure is made after notification of an investigation by the ATO. Remission of Part 7 penalties will be determined under PS LA 2019/1.

    In addition, any payments of SGC and contributions used to offset SGC will not be tax deductible.

    Employee entitlements

    When you pay outstanding SG contributions, your employees will receive the following amounts:

    • SG shortfall
    • nominal interest from the start of the relevant quarter to the date the ATO receives your disclosure
    • general interest charge that accrues on the SG shortfall amount until the amount of SGC is fully paid.

    Where an employee exceeds the contributions cap because of these contributions, the Commissioner of Taxation will exercise discretion to disregard the contributions made under the amnesty.

    Contributions made under the amnesty will not count towards your employees' income or contributions for Division 293 purposes.

    Example: Super contribution cap

    Ali works for an office supplies company. The company identifies that it has not paid employees their SG entitlements. They make a voluntary disclosure under the SG amnesty.

    The company pays $5,300 to the ATO which the ATO then pays into Ali’s super fund.

    Ali contributes some of his own money into super. He is worried the extra $5,300 will take him over the annual concessional contribution cap of $25,000.

    Ali phones the ATO to find out what to do. The ATO tells him they will ignore the extra contributions for the purposes of the contributions cap. Because Ali’s employer included him in their disclosure as part of the amnesty, Ali does not have to do anything. The company’s contributions made under the amnesty are not counted towards his contribution cap.

    End of example

    Super guarantee amnesty key dates

    Super guarantee amnesty key dates

    Description

    Dates

    Quarters that qualify

    1 July 1992 to 31 March 2018

    Quarters that don’t qualify

    Quarter commencing 1 April 2018 onward

    Amnesty period

    24 May 2018 to 06/09/2020
    (see note 1)

    No need to apply or lodge again if already notified us of unpaid super

    24 May 2018 to 06/03/2020
    (see Note 2)

    Need to apply for the amnesty on the SG amnesty form to be considered for amnesty

    Date of royal assent 06/03/2020 to 07/09/2020
    (see Note 1)

    Payments of SGC eligible for the tax deduction

    24 May 2018 to 07/09/2020 (see Note 1)

    Payments of SGC not eligible for tax deduction

    Before 24 May 2018 and after the end of the amnesty period  07/09/2020
    (see Note 1)

    Minimum Part 7 penalty of 100%
    (see Note 3)

    generally have a minimum penalty of 100% applied  

    From the day after the end of the amnesty period 07/09/2020
    (see Note 1)

    Table notes:

    • Note 1: six months after the day the Amnesty receives royal assent, however as the end date falls on a weekend, employers will have until 11:59PM on 7 September to disclose, lodge and pay under the amnesty.
    • Note 2: the day before date of royal assent
    • Note 3: minimum part 7 penalty of 100% of the SGC

    Next step:

    See also:

    Last modified: 08 May 2020QC 55626