Earlier this year, single touch payroll was introduced to Employers with 20 employees or more.
What this means is businesses have to report information such as salary or wages, tax withheld and superannuation payments to the ATO every time they pay their employees.
Businesses with less than 20 employees will have the same reporting requirements from 1st July 2019.
The system is designed to make reporting easier for employers, but also to try and eradicate the massive unpaid super issue.
Did you know, between 2011 and 2017, the ATO has estimated employers have not paid their workers $17 billion in super! Seventeen Billion.... That is huge!
Previously, the most common way the ATO would find out about a lack of super payments, is if an Employee made a complaint, or an audit was performed. Unfortunately a lot of the time, Employees do not make complaints because they are unsure of their actual entitlements, or not comfortable actually making a complaint.
This will therefore take the onus of the employee, and the ATO will more easily be able to track super entitlements.
Having the entitlements tracked by the ATO, means Employers will need to be very careful to make sure that they are making the required payments to super. If not, they risk penalties as high as $10,600 or 75% of the liability. This is of course on top of what is owing to the Employee, plus assumed earnings. This can be massive to an Employer, and usually it isn't just one employee, but multiple.
One of the reasons Employers don't make the required super payments is due to limited cashflow, and trying to find the required amounts on a quarterly basis. If businesses pay the amounts regularly - with each pay cycle, it is much easier to manage.
So what to do if you think you haven't paid the right amount of super...
Talk to us if you are unsure at all!
The ATO are proposing an 'amnesty' which is proposed to run until May 2019.
This is to give Employers the opportunity to do the right thing, and pay any outstanding super to Employees without any penalties. After this amnesty, expect the ATO to come down HARD on Employers who don't pay the required super entitlements. This is your chance to to get organised, and not get penalised!