The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019, which just passed federal parliament, encourages employers to come forward and pay any unpaid superannuation in full.
Small Business Ombudsman Kate Carnell says while most small businesses do the right thing in this area, with 95% already complying, the amnesty will give them a further six months to ensure they’re compliant.
“This is a one-off amnesty that gives small business an opportunity to get up to date with outstanding payments to current and past employees, without being slugged with the harsh penalties that usually apply,” explains Ms Carnell.
The federal government says the amnesty doesn’t mean employers are off the hook.
Employers must still pay all that is owing to their employees, at a high penalty rate of interest. However, the amnesty will not hit employers with the large lump-sum penalties usually associated with late payment.
Those lump sum penalties generally include a minimum 100% penalty on top of the super guarantee shortfall owed, and up to 200% for the most serious cases.
“We estimate … 7,000 employers will come forward in the next six months before the amnesty ends,” says Assistant Minister for Superannuation Jane Hume.
The Institute of Public Accountants (IPA) chief executive officer Andrew Conway says the one-off amnesty allows employers to clean the slate.
“We acknowledge that small businesses can sometimes experience cash flow issues, making them vulnerable when it comes to meeting their super guarantee obligations by the required due date. This amnesty gives them time to atone,” says Mr Conway.
If you think your business might have made a mistake and underpaid staff super, but you’re worried about the cash flow issues raised by Mr Conway, get in touch.
We can help you apply for business finance that’ll help support both your employees’ future and your business’s cash flow.
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