This week the governments superannuation amnesty bill was waved through the Senate. It took almost two years but it finally happened and for clients with outstanding superannuation – this is definately good news.
In basic terms, the bill allows an “amnesty” for employers to pay superannuation that hasn’t been paid before and make up for prior non-compliance. When superannuation is paid late, there are generally 3 components:
- The actual super owed
- Nominal interest
- Administrative penalty
The calculation of late paid superannuation under the amnesty will not include an administrative penalty. Additionally (and this is my favourite part) the actual super owed and the nominal interest paid will be tax deductible.
An opportunity exists for current businesses to claim large tax deductions in the current year on these additional superannuation payments. In particular, small businesses that have been operating for a long period of time may have unmet SG obligations for business owners, company directors and working family members.
To qualify for the amnesty:
- you must disclose to the ATO that there is a shortfall in super guarantee for a particular quarter for an employee
- the quarter in which there is a shortfall must have ended at least 28 days before the start of the amnesty period (including quarters ending up to 31 March 2018), and
- the ATO must not have declared an investigation into SG compliance for that particular quarter.