Force small employers to use Single Touch Payroll to fight black economy

The Government should extend Single Touch Payroll to small employers to help combat superannuation non-payment in the black economy, says a superannuation industry body.

One aspect of Single Touch Payroll is the electronic reporting of payroll information to the ATO. The reporting of payment of salary and wages, PAYG withholding and superannuation through Single Touch Payroll will be mandatory from 1 July 2018 for employers with 20 or more employees. For employers with 19 or fewer employees it will be optional.

However the Australian Institute of Superannuation Trustees (AIST) says the Government should include all employers in Single Touch Payroll to help address the non-payment of Superannuation Guarantee in the black economy.

AIST says that Single Touch Payroll will ensure the ATO “receives regular and accurate information on superannuation guarantee obligations from all employers.”

AIST, in a submission to the Black Economy Taskforce, says that existing superannuation initiatives – including SuperStream and Single Touch Payroll – are the most effective way of increasing Super Guarantee compliance, as opposed to the Taskforce’s suggestion of using the New Payment Platform (NPP). The NPP is a payment infrastructure planned by the financial industry to “gives consumers, businesses and government departments a platform to make fast, versatile and data-rich payments”.

“The NPP provides a new payments system and is an important and exciting development, but SuperStream has already delivered billions of dollars of benefits to super fund members, and it’s being used to deliver even more benefits,” said AIST.

AIST Senior Policy Manager David Haynes said that the scale of black economy transactions in Australia was a concern, both in terms of employees being underpaid and not receiving their superannuation entitlements.

“One of the best ways to tackle the black economy and unpaid super is to encourage uptake by businesses of electronic payment systems,” he said.

“The technology exists but we need to get all businesses on board.”

AIST also recommends the Taskforce endorse the more frequent reporting to the ATO of when Super Guarantee contributions are received by super funds.

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