The Australian Taxation Office (ATO) will be introducing new measures to target non compliance of Superannuation Guarantee (SG) from 1 July 2018. The ATO will improve processes for recovering unpaid SG by strengthening the use of director penalties by restricting the opportunities for a director to avoid personal liability for his or her company’s tax obligations.
The ATO will keep employees better informed about the compliance and debt recovery activities for unpaid SG that the ATO is undertaking to recover on employee’s behalf (including former employees) irrespective of whether the employee has initiated a complaint to the ATO. A new taskforce will improve the ATO’s capacity to proactively monitor and take action earlier to improve compliance with their SG obligations, encouraging on time full payment of employee superannuation entitlements. The Federal Government will strengthen the penalty regime applying to employers that do not comply with their SG obligations.
The Government has also introduced legislation to complement the superannuation guarantee package already before Parliament by introducing a one off twelve month amnesty for historical underpayment of SG.
The bill incentivizes employers to come forward and do the right thing to their employees by paying unpaid superannuation in full as well as the high rate of nominal interest. However, the amnesty will make it easier to secure outstanding employee entitlements, by setting aside the penalties for late payment that are normally paid to the Government by employers.
Employers that do not take advantage of the amnesty will face higher penalties when they are subsequently caught – in general, a minimum 50% on top of the superannuation guarantee charge they owe. In addition, throughout the amnesty period the ATO will still continue its usual enforcement activity against employers for those historical obligations they don’t own up to voluntarily. The amnesty will run for twelve months from 24 May 2018.
If you have a query regarding meeting your SG obligations, or want further information or help with the amnesty, please contact one of our payroll experts on (02) 9223 9166 to discuss. Alternatively, you can submit an online enquiry form.