ATO urges Payday Super action as deadline looms

Deputy commissioner at the ATO, Emma Rosenzweig, flagged that the flow-on effect may require operational changes, “which is why it’s so important to act early, so you’re well placed ahead of 1 July”.

“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.”

While Payday Super won’t change the amount employers pay their workers, the increased frequency will hopefully address the approximate $6 billion of superannuation that employees are not receiving.

In its first year, Payday Super compliance will be “reasonable and practical” according to the ATO. And while supporting businesses will be a priority, those that are found to be deliberately doing the wrong thing will be detected.

“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 an 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.”

She added that small businesses, in particular, may see advantages in the new system.

“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.

“Act now and be ready – ensure your whole team understands what Payday Super means, and ensure your systems and software are ready to roll out the updates by 1 July.”