The Turnbull Government recently announced that under new draft legislation, employers may face jail terms of up to 12 months, if they do not comply with orders to pay superannuation to their employees.
If passed, the new legislation will also extend the “Single Touch Payroll” system to all employers from 1 July 2019. This system requires employers to report wages, salaries, PAYG withholding and superannuation information directly to the ATO . The expansion of this system will increase the ATO’s access to real time information, whilst also improving employer compliance.
There will be further powers afforded to the ATO, such as the ability to order employers to undertake education on superannuation. Failure to comply with directions from the ATO can result in administrative or criminal penalties .
How does this impact employers
If the legislation is passed, the Single Touch Payroll system is expected to extend to:
- employers with 20 or more employees, from 1 July 2018; and
- employers with 19 or fewer employees, from 1 July 2019.
If necessary, employers should review their pay and superannuation practices prior to this time. Employers should also ensure their payroll systems are up to date and able to report through Single Touch Payroll.