The Australian Taxation Office is the Australian Government’s chief revenue collection agency. The ATO is tasked with managing and regulating the taxation and superannuation systems nationally. The ATO has a few key duties, such as:
One of their vital responsibilities is to ensure the economic and social wellbeing of Australia’s financial landscape. One aspect of this is keeping businesses accountable for how they treat their employees – including their wages, superannuation, and tax. This means they often must deal with businesses operating non-compliantly, resulting in employee mistreatment.
The ATO’s reasoning behind collecting payroll details at each pay event is to keep businesses compliant and streamline reporting in the long run. Hence, the data will simply be kept on record and used for auditing purposes. It is important for employers to note that the ATO always had access to this information but in a bulk annual report. Now, they will be able to easily view the details of the payroll to ensure compliant payments are being made.
The ATO may also make the personal PAYG and superannuation details available to each employee online via their ‘MyGov’ account.
Over the past few years, there have been many instances where businesses have deliberately operated in defiance of regulations surrounding super contributions and employee earnings.
Hence, one of the main reasons behind the introduction of Single Touch Payroll reporting is to encourage compliance and transparency within business operations. As businesses are aware that the ATO can view their payroll details in real time, the ATO hopes this will ensure higher levels of compliance.
Furthermore, the introduction of Single Touch Payroll aims to streamline the payroll reporting process.