2.85 billion reasons the ATO is looking at superannuation payments

29th August, 2017

The Australian Tax Office (ATO) is increasing its efforts to make sure employers are paying their employees’ super, and it’s been given the budget to do so.

This morning the ATO released its first ever estimate of the Superannuation Guarantee gap – or the gap between what employers are required to pay the ATO as part of their obligations and what’s actually being paid.

It turns out the gap is a princely $2.85 billion.

“While this analysis shows that 95 percent of the estimated superannuation guarantee is paid to employees, the gap exists because some employers appear to not be meeting their super guarantee obligations either by not paying enough or not paying at all,” said ATO Deputy Commissioner James O’Halloran.

The ATO currently receives 20,000 reports of possible non-payment from employees or former employees per year.

While the ATO said that it responds to every single report, it said it would increase its “proactive case work by one third this financial year”.

READ: The deduction mistake on the ATO’s radar

“We have improved our analysis of data to detect patterns in non-payment, and are working more closely with other government agencies to exchange information,” said O’Halloran.

The ATO has also been given a fresh round of funding from the Federal Government for a Superannuation Guarantee Taskforce to “crack down on employer non-compliance”.

The good news is that if you’re processing payroll through software such as MYOB, Superannuation Guarantee amounts are automatically calculated.

The government said that as part of a suite of measures aimed at closing the Superannuation Guarantee gap it would require super funds to report received contributions more frequently.

This means discrepancies will be brought to the attention of the ATO quicker.

The ATO will also be given the power to seek court-ordered penalties in some cases, while recovery powers will be improved.

It also pointed to the move towards Single Touch Payroll (STP) as a measure which could close the gap.

READ: What you need to know about Single Touch Payroll

Single Touch Payroll is a reporting change for employers.

Employers will need to report payments such as salaries and wages, PAYG withholding and super information electronically through to the ATO directly from their payroll solutions at the same time they pay their employees.

This means the ATO will be able to measure discrepancies between payment of employees and Superannuation Guarantee payments in real time.

Employers with 20 or more employees will need to move to this system by 1 July next year with smaller employers to follow the next year, however for smaller employers the move is optional.