Ideas Tax Knowledge Blog

Superannuation Guarantee Amnesty (2) – Consequences for Not Meeting SG obligations

Written by Ideas Group | Jun 1, 2020 3:55:12 AM

 

Superannuation Guarantee Charge (SGC) Overview:

When an employer fails to meet their Superannuation Guarantee (SG) obligations for a quarter, they must pay the SGC and lodge an SGC statement by the 28th day of the second month after the quarter ends.

Components of SGC:

  1. Total Individual SG Shortfalls: The sum of SG shortfalls for each underpaid employee, calculated based on their salary or wage base and shortfall percentage for the quarter.

  2. Choice Shortfall: Penalty for not meeting choice of fund obligations, limited to $500 per employee per notice period.

  3. Nominal Interest Component: Additional amount (currently 10% p.a.) to compensate for delayed SG contributions, calculated from the beginning of the quarter.

  4. Administration Component: Fixed $20 per employee per quarter.

Penalties:

  • Part 7 Penalty: Additional penalty for late SGC statement lodgment, up to 200% of the SGC payable.
  • Administrative Penalty: General penalty for underpaid SGC due to false statements or default assessment, up to 75% of the SG shortfall.

Other Consequences:

  • Loss of Deduction: SGC and late contribution offsets are not tax-deductible.
  • General Interest Charge: Accrued on late SGC payments, excluding nominal interest and administration components.

Director Penalty Regime:

For SGC liabilities from June 2012 onwards, directors become personally liable if the company fails to pay the SGC in full by its due date.

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