Chartered Accountants Australia and New Zealand (CAANZ, formerly ICAA) have told the ATO that superannuation guarantee payments from employers should be made more frequently, as part of Single Touch Payroll.
CAANZ says initiatives such as Single Touch Payroll will help address non-reporting and non-payment of PAYG Withholding and superannuation.
Though superannuation guarantee contributions are only required to be made after the end of each quarter, some employers make the payments much more frequently.
From a public policy perspective CAANZ believes there is “merit in more closely aligning contributions with the payroll cycle.”
However, for small and medium enterprises (SMEs) “the initial goal should be more frequent payment arrangements rather than payments which are contemporaneous with the payroll event.”
CAANZ says increasing the frequency of superannuation guarantee payments is “likely to attract strong criticism” from SMEs. This is especially given there is already concern about the existing obligations.
Issues for SMEs in implementing Single Touch Payroll include cash-flow problems and an increase administrative burden.
CAANZ recommends that, while larger business are moved onto a timetable of making superannuation guarantee contributions at the same time as salary and wages, SMEs should be allowed more time.
Though all businesses would have an obligation of contemporaneous reporting, the timing of payments would be different.
“For SMEs, the goal should be closer alignment rather than actual alignment with the payroll event. Further research should be conducted on what is an appropriate time lag for this sector.”
Additionally CAANZ calls for “generous transitional arrangements and a comprehensive education strategy,” to support SMEs as Single Touch Payroll is implemented. When similar systems have been implemented overseas governments have provided free software, subsidies or a staged implementation.
Update: The Government has announced that the start date for Single Touch Payroll will be pushed back.
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