With an estimated shortfall in superannuation payments of around $2.8 billion, the Australian Government are introducing a two-fold front to tackle the issue of unpaid superannuation. There will be a crackdown on employers who are not complying with superannuation requirements and an increase in mandatory reporting for small employers, who are the main offenders.
Legislation
Legally, employers are obligated to pay 9.5 percent in superannuation to all employees, including part-time and casual employees, 18 years and over earning more than $450 gross a month.
The proposed changes to penalties mean that employers who do not follow instruction from the ATO to pay superannuation entitlements, along with hefty fines, can ultimately face imprisonment of up to 12 months. Directors of companies are personally liable for missed contribution payments, and if payment orders are defied, will be exposed through the allocation of a “director identification number” to aid the Tax Office in policing those who are non-compliant with fulfilling their superannuation requirements and short-changing their employees.
Introducing STP
Additionally, Single Touch Payroll (STP), which is mandatory for employers with over 20 employees from 1 July 2018, is planned to expand and include employers with 19 or less employees from 1 July 2019. Through STP employers must report all payments such as salaries and wages, pay as you go (PAYG) withholding and superannuation information as part of the payroll process every time employees are paid. The upside of this for employers is that STP will streamline these reporting processes and save time in the long run.
Where previously the ATO were informed of unpaid super largely through employee complaints, they are now taking ownership in identifying employers who neglect to pay super contributions and will enforce serious penalties.
Are you paying all of your employees the super they are entitled to? Find out.
If you have 20 plus employees, are you prepared for implementation of STP on 1 July 2018? We can help.
More info…
Here’s how to run a quick check of your super obligations, to make sure you’ve got everything sorted.
ATO’s Penalties, amendments and objections
The Treasury – Superannuation Guarantee Integrity Package
The material and contents provided in this publication are informative in nature only. It is not intended to be advice, and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
Ryan Miller is the founder of Keeping Company, May 2011 – Present. A tie-loathing, people person with an entrepreneurial spirit. Ryan’s drive to modernize the accounting industry coupled with his desire to help people succeed saw the birth of Keeping Company. Focusing on the SME space, KeepingCo. empowers business owners by providing high-quality end-to-end accounting and business advisory services.
Ryan took his first Accounting role working at KPMG. He went onto further refine his skills as a Chartered Accountant taking the role of Director of a Chartered Accounting firm in Erskineville.
Ryan is a fully qualified Chartered Accountant and a member of the Institute for Chartered Accountants Australia and New Zealand. He is also a Registered Tax Agent and holds a Bachelor of Commerce from the University of South Australia.