The Australian Taxation Office is tackling the growing $3.6 billion unpaid super problem with its Single Touch Payroll (STP) system that closely monitors employers' inability to pay superannuation entitlements, with the first phase due to roll out on 1 July.
Under the STP legislation introduced in August 2016, employers with more than 20 staff members will report salary and wages and Pay as You Go (PAYG) withholding amounts to the ATO in 'real time' or at the same time employees are paid.
According to the ATO, there will be no changes to the way employers pay their tax or superannuation, rather "when those payments are made to their employees' funds, the information will be automatically reported to us."
STP aims to reduce the risk of businesses falling behind on paying superannuation entitlements, improve the way the ATO monitors this and implement early intervention if super guarantee contributions are not being paid.
About 2.4 million or one-third of Australian workers are missing out on some or all of their superannuation entitlements to the tune of $3.6 billion per year, according to a joint report submitted by Cbus and Industry Super Australia at the superannuation guarantee non-payment Senate inquiry, which wrapped up on Tuesday.
Cbus urged the Federal Government to align workers' superannuation the same time wages are paid.
Quarterly payment cycles for superannuation guarantee creates a non-compliance risk and increases the likelihood payments are missed, Cbus said.
From 1 July 2017, the ATO will be 'systems ready' for employers with 20 or more employees and required to report from 1 July 2018.
Employers with 19 employees or less are not required to use the STP system at this stage, but the ATO said it will run a pilot for small businesses soon.