The ATO has identified that businesses in the supermarket, bakery, computer system design and car retailing industries often need more help meeting their tax and super obligations.
From July 2016, the ATO will be undertaking audits of employers who continually fail to meet their obligations, particularly those who do not correctly meet their superannuation obligations. In this regard, the tax office will be examining:
• how much employers are required to pay
• if employers are meeting their quarterly deadlines
• if employers pay super for contractors
• if employers are keeping accurate records
• if employers pass on an employee’s TFN to their super fund within 14 days of receiving it
Employers must pay their employees superannuation if all of the following apply:
• the employee is aged 18 years old or over
• the employee is paid $450 (before tax) or more in a calendar month
• the employee works on a full-time, part-time or casual basis
Super payments for employees must be made at least four times a year by the quarterly due dates of April 28, July 28, October 28 and January 28.
Employers who miss those deadlines become liable for the Superannuation Guarantee Charge (SGC). The ATO has said it will support employers who genuinely try to rectify their mistakes by catching up on late payments and paying a little extra into their employee fund accounts. No action is likely to be taken in these circumstances. However, if an employer does nothing and waits for an employee complaint or for the ATO to audit their business, the ATO has warned that the SGC and other penalties may be applied. The ATO has also reminded employers that they must pay superannuation contributions for contractors who they employ under a contract that is wholly or principally for the labour of that person. The reasoning behind this is because the contractor is considered as an employee for the purpose of super guarantee. Another area where employers make mistakes is regarding the choice of employee super funds. All employees are eligible to choose which super fund their super contributions are paid into, therefore employers must provide them with a standard choice form within 28 days of the employee commencing work. While employees do not have to complete the form if they don’t want to nominate a fund, employers must give them a choice if they are eligible.