Superannuation is a cornerstone of Australia’s retirement system, ensuring employees build financial security for their future. For employers, paying super correctly and on time is not optional – it’s a legal requirement. Recently, the Australian Taxation Office (ATO) has made it clear it will be stepping up compliance efforts and cracking down on businesses that fall short of their superannuation obligations.
So, what does this mean for your business, and how can you stay on the right side of the law?
Why the ATO Is Taking Action
The ATO has found that many employees across Australia have been missing out on their rightful superannuation payments. In recent years, enforcement action has led to hundreds of millions of dollars in unpaid super being recovered and transferred into workers’ retirement savings accounts.
This increased scrutiny is partly driven by the fact that unpaid super is not just a financial issue – it impacts employees’ long-term security and trust in their employers. For the ATO, ensuring compliance is about protecting workers’ rights while also maintaining fairness across the business community.
Your Superannuation Obligations
As an employer, you are legally required to:
- Pay super for eligible employees earning $450 or more before tax in a calendar month (though this threshold is being phased out).
- Pay the correct super guarantee (SG) rate, currently set at 11.5% of ordinary time earnings from 1 July 2024, and scheduled to rise to 12% by 1 July 2025.
- Make payments on time, at least quarterly, by the due dates set by the ATO.
- Submit payments through a compliant clearing house or SuperStream system to ensure they are processed correctly.
Failing to meet these obligations can result in significant penalties, including the Superannuation Guarantee Charge (SGC) – a costly alternative to simply paying super on time.
The Consequences of Non-Compliance
The ATO is investing in data-matching technology and real-time reporting to detect unpaid super quickly. Through tools like Single Touch Payroll (STP), the ATO can now compare payroll data with superannuation fund records, making it far easier to spot discrepancies.
If your business is found to be non-compliant, you could face:
- Liability for the SGC, which includes the unpaid super, interest, and an administration fee.
- Additional penalties for repeated or serious breaches.
- Reputational damage that may impact staff retention and recruitment.
Simply put, the cost of non-compliance far outweighs the cost of staying on top of your obligations.
How to Protect Your Business
Being proactive is the best approach. Here are some practical steps to ensure your business stays compliant:
- Review your payroll systems to ensure calculations are accurate and aligned with the latest SG rates.
- Check employee eligibility regularly, especially with changes to legislation.
- Pay super contributions well before the due date to allow for clearing times.
- Conduct regular audits of your superannuation payments to catch errors early.
- Seek professional advice if you’re unsure about your obligations.
The ATO’s crackdown on unpaid superannuation is a timely reminder that compliance is critical for all Australian businesses. Beyond avoiding penalties, paying super correctly builds trust with your team and contributes to their long-term financial wellbeing.
At Glance Consultants, we work with businesses across Australia to streamline payroll, ensure superannuation compliance, and prepare for upcoming legislative changes. If you’re unsure whether your business is meeting its obligations, now is the time to act.
Get in touch with our team at Glance Consultants today to safeguard your business and your employees’ futures.
