After the SGC amnesty: the penalty remission guidelines

Even with the superannuation guarantee amnesty closing last September, if you have discovered you were short on meeting your SGC obligations between 24 May 2018 and 7 September 2020, it’s important for you to make every effort to remedy as soon as possible.

Penalties are back in place for unpaid SGC for this period but the amount your business will be penalized is subject to a new set of discretionary guidelines.

Understanding the penalties

For employers with SGC shortfalls from the period between 24 May 2018 and 7 September 2020, the ATO will have a minimum penalty of 100 per cent applied and can be as much as 200 per cent unless:

  • the employer voluntarily came forward to lodge an SG statement prior to being notified of any ATO compliance action, or
  • where exceptional circumstances prevented the employer from lodging an SG statement during the amnesty period or before the employer was notified of ATO compliance action.

How the ATO will determine the penalty amount

ATO officers, when deciding whether it is appropriate to remit the penalty down from 200 per cent, will be guided by a four-step penalty remission process. The steps include:

  1. setting a base penalty based on the employer’s attempt to comply with their SGC obligation;
  2. determining any penalty uplift based on the employer’s compliance history;
  3. identifying other mitigating facts and circumstances; and
  4. identifying any exceptional circumstances that prevented lodgement of an SG statement prior to the notice of ATO compliance action.

If the employer has a good compliance history, the penalty should remain at the base penalty level.

Making good your shortfalls

The steps you need to take to make good your shortfalls:

  1. Determine the SG shortfall for each employee for each quarter;
  2. Prepare and lodge the SGC statements;
  3. Pay the SGC to the ATO;
  4. Request remission of the Part 7 penalty;
  5. Once the SGC statements and payment have been processed by the ATO, an amended assessment will then be issued.

We’re ready to help. Contact your Accounting Services Director or Manager on +61 3 9820 6400 for more information or assistance in righting your shortfall.