Penalties for Outstanding Superannuation Obligations

Are your Superannuation Obligations up to date?

With the introduction of Single Touch Payroll, the ATO will receive live data of your employee obligations and will be aware of any unpaid Superannuation Guarantee Contributions (SGC).

The ATO proposed to waiver penalties under their Superannuation Guarantee Amnesty which has not yet passed parliament and is yet to become law.

The Amnesty would allow employers who have unpaid (SGC) between 1 July 1992 and 31 March 2018, to make a voluntary disclosure prior to the 23rd of May 2019 without penalty.

If you have unpaid SGC for this period, you should consider making a voluntary disclosure to reduce your risk of penalties.

Employers who don’t make a voluntary disclosure prior to the 23rd of May 2019 will face severer penalties, with the introduction of new legislation being passed earlier this month.

The new legislation will allow the commissioner to issue a direction to an employer to;

  • Pay their outstanding superannuation obligations
  • Complete an approved education course
  • And receive penalties or imprisonment for 12 months (in serious cases), or both.

Below is an example (provided by the ATO), of the potential penalties an employer may face for unpaid SGC obligations;

Key Note:

  • The above example does not include ATO penalties as these vary case by case.
  • The SGC was calculated on the full wage, not just ordinary time earnings.
  • The SGC paid is non-deductible to the business because it is paid late.
  • The ATO may issue a Director Penalty Notice making the Director personally liable for the debt.

We strongly recommend that employers rectify an unpaid SGC obligations as soon as possible, to avoid any potential penalties in the future.

If you are unsure how to determine the amount outstanding or how to go about payment, please contact us; we are more than happy to assist you.

We are here to help you through the process!

The new legislation is awaiting Royal Assent, with the legislation to take effect from 1 April 2019, but will apply to SGC obligations arising from 1 July 2018.
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