Single Touch Payroll - Strategic Tax Accountants

The Government has declared that it is unacceptable for people to not be paid their superannuation entitlements, releasing further superannuation reforms aimed at making employers meet their super obligations to their workers.

The draft laws, announced by the minister for Revenue and Financial Services, Kelly
O’Dwyer, last week, extend single touch payroll to all employers from 1 July, 2019. The
Government hoped that this would improve reporting of super obligations.
This, combined with the event-based reporting already coming into force on 1 July this year, would improve the Australian Taxation Office’s (ATO’s) ability to get real-time information about employers’ compliance.

The ATO recently released a report that estimated that employers had underpaid compulsory superannuation guarantee (SG) contributions by a staggering $2.85 billion.
As a result the Government will provide the ATO with additional funding for a
Superannuation Guarantee Taskforce to crackdown on employer non-compliance.
Although $2.85 billion seems large, it only represents about a 5.2 percent shortfall in
compulsory employer super payments. Hence about 95 percent of employers are doing
the right thing.

Through its compliance activities, the ATO identified some key factors which may be
contributing to this super guarantee gap.

They include:

non-compliance is reported more often about employers in accommodation and food services, construction, manufacturing and retail trade industries,
drivers of non-compliance include poor cash flow management by employers, poor
record keeping and low levels of business experience, and
insolvency among employers means that debts are sometimes difficult to collect on
behalf of employees. Around 50 per cent of collectable super guarantee charge debt is subject to insolvency.

The Government plans to introduce a package of measures designed to give the ATO near real-time visibility over SG compliance by employers.

It includes measures to:

require super funds to report contributions received more frequently, at least monthly, to the ATO,
roll out Single Touch Payroll (STP). Employers with 20 or more employees will
transition to STP from 1 July 2018 with smaller employers (with 19 or less
employees) moving to STP from 1 July 2019. To align payroll functions with regular
reporting of taxation and super obligations,
https://www.ato.gov.au/business/Single-Touch- Payroll/?=redirected
improve the effectiveness of the ATO’s recovery powers, and give the ATO the ability to seek court-ordered penalties in the most severe cases of non-payment.

These measures are on top of its proposed legislation to apply from 1 July 2018 to ensure
salary sacrifice contributions do not reduce an employer’s SG obligation.