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  • Feature: Helping businesses manage their employer obligations

    Employment arrangements

    Businesses that engage workers need to determine if the arrangement constitutes employment or independent contracting. To assist them with this, we provide guidance on our website, as well as an online Employee/contractor decision tool. We are reviewing the support we provide, including the effectiveness of the tool.

    Where an employment relationship is created, the employer needs to register for PAYG withholding, withhold tax from wages, pay superannuation contributions and, possibly, report and pay tax on fringe benefits. SuperStream provides a way for employers to meet their superannuation contribution payments in a consistent format to help get the data directly into an employee’s fund. We are providing education to employers and employees where a genuine misclassification has occurred.

    Fringe benefits tax

    During 2016–17, we took a number of steps to improve understanding of, and compliance with, fringe benefits tax (FBT) obligations. These include:

    • revising our online FBT guide for employers to provide clearer and simpler guidance
    • hosting webinars on different aspects of FBT, such as lodgment, entertainment and not-for-profits, providing an opportunity to connect with clients directly and hear about the challenges they face when navigating through their FBT obligations
    • publishing a practical compliance guideline aimed at reducing compliance costs for employers with car fleets
    • producing two short videos that explain how FBT applies to motor vehicles and lifestyle assets – these videos have been promoted through the ATO’s social media channels
    • continued consultation with employer and practitioner stakeholders to identify opportunities for establishing FBT safe harbours to align the tax treatment with commercial realities and provide appropriate risk mitigation.

    Superannuation guarantee

    We are also providing contemporary communication and education material to help small businesses understand and meet their super guarantee obligations, including:

    • reminder messaging for the quarterly payment cycle
    • guidance for employers and their advisers on how to check their super obligations in six easy steps
    • use of educational videos for employers, available on atoTV and YouTube
    • website content and online tools to assist small business employers correctly engage their workers as employees and to calculate their super guarantee payments
    • the SuperStream small business education program, which focuses on small employers not yet SuperStream-compliant in industries with a low digital capability and those in regional Australia.

    Most employers do the right thing, but some do not. The ATO follows up on all reported complaints from employees about potential unpaid super guarantee entitlements. We focus on employers who are at high risk of not meeting their super guarantee obligations or suspected of having not made the required payments. Our risk-differentiated approach takes into account factors such as an employer’s industry, size and compliance history.

    This supports employers who are willing to engage with us and want to get things right. It also allows us to take appropriate action on those employers who are unwilling, unable or deliberately choosing to not meet their obligations.

    To assist small business employers be SuperStream-compliant and meet their super guarantee obligations, we provide a free service, the Small Business Superannuation Clearing House (SBSCH). This makes the super contributions process easier – as employers make one secure electronic transaction to the SBSCH, which it then distributes to employees’ super funds. Around 204,300 employers made successful superannuation payment through the SBSCH.

    Single Touch Payroll for substantial employers

    Single Touch Payroll enables employers to report each employee’s salary, wages, PAYG withholding amounts and super entitlements to the ATO at the same time as they run their payroll.

    Employers who report this information through Single Touch Payroll will not need to provide the employee with a payment summary at the end of the financial year. The ATO will make the information available to employees and their tax agents through myGov, and as pre-filled information in their tax return.

    By increasing visibility, Single Touch Payroll is expected to improve compliance with superannuation and PAYG withholding obligations, protecting employee entitlements as well as tax revenue.

    Single Touch Payroll will be phased in gradually. We are ready to receive Single Touch Payroll reports from 1 July 2017, with a small number of digital service providers and employers as part of a limited release of the payroll reporting function. Further functionality will become available progressively up to 1 July 2018, when all employers with 20 or more employees will be required to report payroll information through Single Touch Payroll.

    Demonstrating our products and services

    To increase awareness, we invested in showing businesses our suite of products and services with a focus on digital. Helping people lodging online, as well as demonstrating services like Alex (our online virtual assistant), our Small Business Newsroom and the ATO app, enhances the client experience, builds their confidence in using digital products and increases the take-up rate. Recent analysis of a group of clients revealed that on-time lodgment of tax returns and BAS went up significantly after showing them how going online will benefit them. Show Me principles will be embedded in everyday business activities to positively influence client behaviour and help small businesses meet their obligations.

    Helping businesses manage their employer obligations feature


      Last modified: 30 Oct 2017QC 53655