The ATO is hamstrung by systemic issues on reporting the payment of the superannuation guarantee (SG) obligation, according to the Institute of Public Accountants (IPA). 

The Commissioner of Taxation is responsible for the administration of the Superannuation Guarantee (Administration) Act 1992 (SGAA). 

“Superannuation funds report member contributions to the ATO on an annual basis and as a result, the ATO has no visibility of payment information for up to 15 months after the start of a financial year,” said IPA chief executive officer, Andrew Conway. 

“This extended gap makes it difficult for the ATO to identify non-compliant employers in a timely manner. 

“There is a lack of transparency around the date that SG is actually paid. Employers have 28 days after the end of the quarter to remit SG contributions for employees. This time lag makes the ATO’s task of tracking non-compliance much more difficult. 

“Single Touch Payroll (STP) which is mandatory from 1 July 2018, has the potential to increase transparency and visibility, which will help to expose non-compliant employers on a more timely basis. 

“However, STP will not be compulsory for businesses with less than 20 employees. The majority of non-compliant employers are small business operators so even with STP, timely corrective action will continue to be initiated from employee complaints, forcing the ATO to play catch-up. 

“The reality is that there are employers doing the wrong thing by their employees. 

“The onerous penalty regime has done little to curb behaviour of non-compliant employers so the ATO needs timely reporting of SG entitlements and payments to be proactively managing the situation,” said Mr Conway.