The Government has announced that from 1 July 2019 small employers will have to be using Single Touch Payroll.
Single Touch Payroll will involve reporting salary and wages, PAYG withholding and superannuation guarantee information to the ATO as part of the payroll process. This was to apply to large employers (20 or more employees) from 1 July 2018, with it being optional for small employers (19 or fewer employees).
However Minister for Revenue and Financial Services, Kelly O’Dwyer, has now announced that small employers will have to use Single Touch Payroll from 1 July 2019, as part of an effort to combat Superannuation Guarantee non-compliance.
The same day the ATO released its estimate of the extent of the Super Guarantee gap, Minister O’Dwyer announced a package of reforms to give the ATO “near real-time visibility over superannuation guarantee (SG) compliance by employers”.
“Employers who deliberately do not pay their workers’ superannuation entitlements are robbing their workers of their wages. This is illegal and won’t be tolerated,” said Minister O’Dwyer.
“The Turnbull Government is taking action to safeguard and modernise the SG so employers can’t hide from their legal duty. We will give all Australians confidence that the superannuation system is working in their best interests.”
The Government will provide the ATO with additional funding for a Superannuation Guarantee Taskforce to crackdown on employers not complying with their Super Guarantee obligations.
In addition to the changes to Single Touch Payroll, the reforms will require super funds to report contributions to the ATO at least monthly, give the ATO the ability to seek court-ordered penalties for the “most egregious” cases and strengthening the Director Penalty Notice and Security Bonds regimes.
The changes announced were welcomed by Industry Super Australia. However the organisation called for superannuation to be paid at the same time as salary and wages, not just reported.
“More frequent reporting of contributions by super funds will only help if employers are compelled to report in real time wage or salary income which SG should be paid on,” said Industry Super Australia public affairs director Matt Linden.
“With Single Touch Payroll technology extended to small business this will be easier to do,” he said.
The additional funding for the SG Taskforce was also been endorsed by the SMSF Association.
“We welcome the fact that the Government is building on the integrity measures announced already that remove loopholes around salary sacrifice contributions and employer SG obligations,” said SMSF Association CEO John Maroney.
“Ensuring employers are paying the correct superannuation to their employees is critical to give all Australians the opportunity to reap the full benefits of the superannuation system so they can enjoy a dignified and secure retirement.”
“It’s the Association opinion that measures such as the frequent reporting of SG contributions, Single Touch Payroll, and increased ATO powers will help lower this $2.8 billion in missing superannuation payments.
Minister O’Dwyer also pointed to the announced changes so that Salary Sacrificed superannuation contributions cannot count against SG obligations. However this legislation may not be introduced to Parliament in 2017.
These changes were drawn from the recommendations of the Superannuation Guarantee Cross Agency Working Group, though Minister O’Dwyer noted that the Government had not accepted the recommendation to soften the penalties for non-compliant employers.