At the end of 2017, the Mid-Year Economic and Fiscal Outlook report revealed that small businesses would also be required to implement Single Touch payroll. Prior to this release, only businesses with more than 20 employees were preparing themselves for the new reporting practices.
Small businesses have been allowed an extra year to upgrade their payroll software solutions and update their reporting habits. These businesses with less than 20 employees will need to be ready to roll-out Single Touch Payroll from July 1st, 2019.
Due to the fewer available resources within a small business, it is recommended that small business owners take the time to find the best payroll software solution for their needs.
Figures released by the Australian Taxation Office in August 2017 revealed that Australians had been underpaid nearly $17billion in superannuation contributions over the past 8 years. The ATO’s superannuation investigation found that a huge number of Australian employers have not been contributing the mandatory 9.5% of employee earnings into their chosen fund. Owners of small businesses were found to be the ‘worst offenders’.
Single Touch Payroll reporting is a response to this issue, as part of a ‘tax office crackdown’. The Government has put together an ATO task force, who will put their foot down on employer non-compliance. As part of the crackdown, the ATO will be given greater alibility to present court-order penalties to employers who frequently fail to compliantly pay super. ATO Deputy Commissioner James O’Halloran encouraged any employee whose super had been paid incorrectly to contact the ATO for investigation.
The Australian Institute of Superannuation Trustees’ Chief Executive Eva Scheerlinck praised the new reporting requirements, noting that the current non-compliance with super contribution standards is costing employees millions, and leading to poorer retirement outcomes.
“Even on the conservative figures released today, the ATO has confirmed that there is a massive problem of underpayment that has to be addressed,” Ms. Scheerlinck said, “Importantly, this package of reforms includes strengthening employer penalties for non-compliance and enhancing the ATO’s power to deal with repeat offenders.”
Ms. Scheerlinck also noted that Single Touch Payroll is a “critical reform” required to solve the problem of underpaid super. If you would like to know more about Single Touch Payroll and Superannuation, click here.
For more updates and news on Single Touch Payroll, keep an eye on our blog.