ATO deputy commissioner Emma Rosenzweig has urged employers to prepare for payday super now. (Source: ATO\/AAP\/Getty) <\/p>\n
The Australian Taxation Office (ATO)<\/a> is urging bosses to start preparing for the upcoming payday superannuation change<\/a>. From July next year, employers will be required to pay their employee\u2019s super<\/a> at the same time as their salary and wages.<\/p>\n Under the payday super legislation<\/a>, which passed parliament last week, employers can face significant penalties<\/a> if they fail to deposit super into their employee’s fund within seven days of payday. Previously, super only needed to be paid quarterly.<\/p>\n ATO deputy commissioner Emma Rosenzweig said payday super<\/a> marked a \u201conce in a generation change\u201d and urged employers to get ready.<\/p>\n RELATED<\/p>\n \u201cDon\u2019t wait until the last minute, we want employers to start planning for Payday Super now to ensure they are prepared for when the law takes effect,\u201d she said.<\/p>\n \u201cYou don\u2019t have to wait to start paying super contributions more regularly. Many employers are already paying on pay day.\u201d<\/p>\n The change is intended to boost the retirement balances<\/a> of workers, along with making it easier for the ATO to detect and recover unpaid super<\/a>.<\/p>\n Do you have a story to share? Contact tamika.seeto@yahooinc.com<\/a><\/p>\n For a 25-year-old worker, the government found more frequent and earlier contributions would increase their retirement balance by an extra $6,000 in today\u2019s dollars.<\/p>\n For a 35-year-old who has had super unpaid, recovering it would boost their retirement balance by more than $30,000.<\/p>\n Rosenzweig said the change would provide the ATO with earlier visibility of underpayment or non-payment of super<\/a> and allow for a proactive approach.<\/p>\n \u201cThis is [a] critical change in addressing unpaid super and deterring non-payment by employers while ensuring employees are fully compensated for any delays in receiving their super,\u201d she said.<\/p>\n The ATO estimates $6.25 billion worth of super went unpaid during the most recent financial year.<\/p>\n Employers will be given a seven-day deadline from the payment of wages to pay superannuation<\/a>.<\/p>\n If they miss this deadline, they will be liable for an updated super guarantee charge, which will include the shortfall, daily interest and an extra enforcement charge of up to 60 per cent of the shortfall.<\/p>\n The ATO has revealed it plans to recognise employers<\/a> who try to do the right thing and resolve any issues quickly, and they will not be the focus of its compliance action for the first year. It will differentiate between low and high-risk employers.<\/p>\n CPA Australia has backed the ATO\u2019s risk-based compliance approach for the first year, but has called for transitional relief to be extended to June 30, 2028, to allow employers to adapt.<\/p>\n It also called for clearer definitions of key terms, ATO-led nudge messaging to help employers monitor payment timing, and clearer relief for employers impacted by mergers, incorrectly rejected contributions and third-party delays.<\/p>\n CPA Australia superannuation lead Richard Webb said payday super was a positive step for workers, but the transition needed to be fair and practical for employers<\/a>.<\/p>\n \u201cMany businesses will need to overhaul payroll systems, change clearing houses, and retrain staff \u2013 all within a short timeframe,\u201d he said.<\/p>\n \u201cWe\u2019re calling for a longer compliance window and clearer guidance to help employers get it right.\u201d<\/p>\n Rosenzweig said the ATO was finalising its compliance approach.<\/p>\n \u201cWe\u2019re working closely with industry groups, tax professionals, digital service providers and super funds to help prepare employers for the 1 July start date and we\u2019ll be finalising clear guidance on factors we will consider in our compliance approach,\u201d she said.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n