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Superannuation Guarantee Charge Amnesty

Superannuation Guarantee Charge Amnesty

Written by: 
Evan Lowenstein

On the 24 May 2018, the government introduced the Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2018 to give an amnesty for employers who have failed to pay superannuation entitlements on behalf of their employees. The Treasury Laws Amendment (2018 Measures No. 1) Act 2018  provides a 12 month amnesty for employers to self-report underpaid superannuation amounts, during which period the usual penalties for underpayment (non-deductible payments and administrative penalties) will not apply. The amnesty period ends on 24 May 2019.

What is the super guarantee (SG)?

Employers are usually required to contribute an amount equal to 9.5% of an employee’s ordinary time earnings to a superannuation fund for the employee. Superannuation contributions are generally deductible to an employer .

Where an employer fails to make the necessary superannuation contributions for an employee within a required statutory timeframe, the employer is liable to pay the superannuation guarantee charge.

The superannuation guarantee charge consists of the amount of the unpaid superannuation contributions, an administration component ($20 per employee per quarter) plus interest. A penalty of up to 200% of the unpaid superannuation can also apply. However, the ATO can reduce the penalty to between nil to 75% depending upon the circumstances.