ATO is giving employers a ‘nudge’ along

The ATO, ‘Superannuation – a system in transition’ presentation, given by James O’Hallaron, deputy commissioner, superannuation and employer obligation, at the 2019 August ASFA National Policy Roadshow, highlight the unprecedented visibility the tax office now has because of the Single Touch Payroll (STP) rollout.

“The ATO has greater visibility over the super guarantee system than it ever had before.” Mr O’Hallaron said.

“The immediate benefit is for those individuals not being paid their superannuation entitlements is apparent. This visibility and our ability to proactively engage with employers who don’t meet their obligations mean we can better ensure a level playing field for business, particularly small business” he added.

The ATO has focused on using STP data to make it easier for employers to meet, and harder not to comply, with their PAYGW obligations. STP gives employers visibility around their cash flow, enabling them to make decisions that can help drive their business forward.

As the tax office gains increased assurance in the data and the conclusions drawn from it, they’ll use it to move sensibly into proactive ‘nudges’ and warnings to employers. For example, directly notifying or nudging employers that have been identified not to have paid Superannuation Guarantee (SG) to their employees per quarter as required.

The ATO recently piloted this approach with a small sample of 85 employers and contacted them regarding their late payment of SG. After the ATO’s contact, some 50% of these employers then lodged and paid the outstanding SG to the ATO for their employees.

The ATO intends to expand this approach to those employers who haven’t paid SG to their employees within 30 days after the end of the reporting quarter.

The ATO currently has over 314,000 employers (including over 243,000 small businesses) reporting through STP. Employers are now routinely reporting each payday to the ATO on behalf of over 9.4 million employees, approximately 78% of the estimated 12 million employees in Australia.

A lot of micro and small business still have to get set up for STP. Time is running out.

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