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New law means small businesses must comply with real-time super reporting

March 4th, 2019

New legislation has passed that aims to help ensure small businesses meet their legal obligation to pay superannuation for their workers through real-time reporting.

The new law – which will come into force on 1 July 2019 – will mean that employers with fewer than 20 employees will have to comply with real-time reporting of wage and super information to the ATO through “Single Touch Payroll” (STP).

Using payroll or accounting software that offers STP, employers send their employees’ tax and super information to the ATO each time they run their payroll and pay their employees.

Previously, real-time reporting only applied to larger employers, while small businesses were able to take as long as three months to make and report super payments.

Importantly, the new legislation will also shift the burden of identifying and collecting unpaid super from individual workers and ex-employees to the ATO. Up until now, the ATO has largely relied on employees to make complaints to alert them to the non-payment of super – at a very real risk to the jobs of the employees who do this. This measure will apply to all employers.

The Australian Institute of Superannuation Trustees (AIST) has welcomed the news in December. AIST CEO Eva Scheerlinck said: “For too long some businesses have been able to avoid their obligations to pay super because of outmoded laws. Workers have suffered, while non-compliant employers have had an unfair advantage over the majority of employers who are good corporate citizens.”

Research by industry super fund Cbus estimated a shortfall of $3.6 billion each year in the super that employers pay. “That’s a lot of super hard-working employees are missing out on,” added Ms Scheerlinck.

For more details visit the ATO website. Alternatively, speak to your First Super Business Development Manager and learn more on our dedicated Employers page.