Despite cash flow being tight, if you are still employing during the corona experience then you will have a superannuation guarantee obligation.
If you are behind in keeping up to date with your superannuation guarantee (SG) commitments to you employees the time to act is NOW!
The Super Guarantee Amnesty ends on the 7th September 2020.
Under existing law, if you have missed a payment or haven’t paid an employee’s super on time, you are required to lodge a super guarantee charge statement and pay the SG Charge on any SG shortfall amounts.
If you are eligible for the Amnesty you can pay the previously unpaid super and you will not have to pay any penalties or administration. You will also be able to claim a deduction for any payments you make before 7th September.
If you don’t pay the minimum amount of SG for your employee into the correct fund by the 7th of September the SG charge that you have to pay is not tax deductible.
For those of you worried that you may not be able to pay the full amount outstanding you can work out a payment plan with the ATO. The ATO can tailor a payment plan to your individual circumstances and you can still apply for the Amnesty to receive its benefits. Again, you just need to make sure that you have applied for the Amnesty before the 7th September.
The following examples illustrate how the JobKeeper wage subsidies apply to payments to eligible employees, assuming the business qualifies for the JobKeeper Payment:
Example 1: Eligible employee who earns more than $1,500 per fortnight
Arthur is an eligible permanent full-time employee receiving a salary of $3,000 pf before tax and continues to be employed. Arthur will receive the same salary, however, the employer will receive $1,500 per fortnight JobKeeper Payment to partially subsidise Arthur’s salary as long as the business remains eligible. The business will continue to pay Superannuation Guarantee (SG) on Arthur’s income.
Example 2: Eligible employee who earns $1,500 or less per fortnight
Nora is a permanent part-time employee earning $1,000 pf before tax and continues to be employed. The business will increase her wages to $1,500 pf and will receive $1,500 pf which fully subsidises Nora’s salary. The business must pay SG on at least $1,000 of Nora’s income. It may choose to pay SG on the additional $500 pf Nora receives.
Let us know if you are going to struggle to meet your obligations so we can help negotiate a reasonable outcome.
Have a great day!