The ATO is urging employers to act now and prepare so they can start paying super each payday.
ATO Deputy Commissioner Emma Rosenzweig said the transition may require businesses to introduce changes to some of their processes, but employers who start preparing now can make the transition successfully.
“We understand Payday Super makes changes to obligations and processes for businesses which is why it’s so important to act early, so you’re well placed ahead of July 1,” she said.
About $6 billion in superannuation is currently unpaid to workers.
Payday Super is designed to close this gap by ensuring contributions are paid on time, every time.
“It’s important to make clear that for most employers, Payday Super won’t change the amount of super you are paying to your employees, just the payment frequency,” Ms Rosenzweig said.
“The change in frequency supports timely reporting to the ATO, to make it easier for those who are doing the right thing and harder for those deliberately avoiding paying their employee entitlements.”
During the first year of Payday Super, the ATO will take a reasonable and practical approach to compliance, supporting businesses to make these payments on payday while focusing enforcement on those who deliberately do the wrong thing.
“We understand when something is new you might not get it perfect the first time, but it’s important to start, have a go, give yourself as much time as possible to fix any errors as they occur.
“If we can see employers making effort to move towards the payday model and fixing errors quickly, they won’t be the focus of any compliance actions from the ATO in the first year.”
More information is available in the ATO’s practical compliance guideline.
Additional information to help employers manage the changeover including on Single Touch Payroll, closure of the Small Business Superannuation Clearing House and reporting timing considerations is also available on the ATO website.
“We’ve heard from small businesses that moving to more frequent payments has made it easier to manage cash flow, so I encourage employers to consider how paying super on payday can support their cash flow planning,” Ms Rosenzweig said.
“Act now and be ready - ensure your whole of team understands what Payday Super means, and ensure your systems and software are ready to roll out the updates by July 1.”
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