Tax

Superannuation dodgers targeted as ATO puts single touch payroll to use

Matthew Elmas /

Thousands of employers marked as superannuation late-payers are being contacted by the Australian Taxation Office (ATO) this week in what is the first round of compliance action directly utilising single touch payroll (STP) data.

The tax office has been busy getting its head around the multitudes of information flowing into its systems from the expanded real-time payroll regime and superannuation fund reports, and has begun actioning insights to chase up laggards.

In a presentation delivered to the Australian Institute of Superannuation Trustees on Monday, ATO deputy commissioner for superannuation and employer obligations, James O’Halloran, said some 2,500 employers will be contacted this week alone.

“We’re now starting to actively use the data to warn employers who appear not to be paying the required SG [auperannuation guarantee] on time, in full or at all, that they should change their behaviour,” he said.

“We now have an unprecedented level of ‘visibility’ of super information at the account and transaction level and we’re increasingly using this capability,” O’Halloran also said.

About 75 million payment transactions from the first three quarters of 2018-19 have been examined by the tax office recently, covering a whopping 400,000 employers.

The figures reveal most businesses are abiding by the law, although there is a sizable portion which is not.

Between 90% and 92% of contribution transactions by volume were paid on time over the examined period, and between 85% and 90% of transactions by dollar value.

In addition to the 2,500 employers being contacted this week, another 4,000 will receive due-date reminders.

The efforts come amid a broader effort from both the ATO and the federal government to clean up Australia’s superannuation system by helping Australians consolidate their accounts, find unclaimed money and ensure firms are complying with the law.

Figures published by the tax office about a year ago estimated Australia’s superannuation guarantee gap — the difference between what should be paid under the law and what is paid — was $2.79 billion, including enforcement activities, in 2015-16. 

More recent numbers analysing 2016-17 data, published by Industry Super Australia in May, found the gap has grown 25% over the last three years, totalling $350 million in extra unpaid entitlements. 

Alongside its “nudges and warnings” effort, the ATO’s broader superannuation audit work saw it contact 22,000 employers in 2018-19, raising assessments for $805 million in outstanding super, O’Halloran said.

About 5,000 individual director penalty notices were issued as a result of compliance activity in 2018-19, valued at $283 million across 3,600 companies.

The ATO’s ability to crack down on superannuation laggards is expected to improve dramatically in the coming years, thanks to STP reporting and interest from government in addressing the superannuation guarantee gap.

Attention is now turning to analysing SG transactions and patterns for the fourth quarter of 2018-19.

“This was only an aspiration a few years ago,” O’Halloran said of the ATO’s newfound capabilities.

NOW READ: “Nudges and warnings”: ATO steps up super payments crackdown

NOW READ: “Biggest compliance undertaking since GST”: Everything you need to know about the new single touch payroll laws

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Matthew Elmas

Matthew is the news editor at SmartCompany. You can contact him at [email protected].

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