ato logo
Search Suggestion:

ATO action to reduce the gap

How we support our clients to meet their compliance obligations.

Last updated 29 October 2023

A range of employer behaviours can affect the gap, including:

  • failing to withhold or under-reporting PAYG withholding
  • failing to report or pay withholding on time
  • incorrectly differentiating between employees and contractors after changing their workforce mix/worker status for a more flexible workforce.

These behaviours are driven by a range of factors, including:

  • businesses being impacted by unforeseen events, which put pressure on their cash flow
  • employers deliberately being non-compliant for personal gain such as improving liquidity, cash flow and competitiveness
  • employer and tax agent lack of awareness or understanding of STP obligations and penalties and associated PAYGW payment obligations
  • inadequate governance of payroll practices which causes incorrect withholding, reporting and payment

We focus our efforts in 2 main areas:

  • We use prevention activities to help employers get things right and deal with genuine mistakes.
  • We use correction activities that deal with opportunistic or deliberate non-compliance behaviour.

To help employers get it right and promote a level playing field, we:

  • offer assistance and advice to encourage voluntary compliance such as our employer or contractor information
  • use data and tailored risk treatments to engage early with employers who may be at risk of moving towards non-compliance
  • use our insights as a part of a media strategy to improve employer understanding and voluntary compliance
  • conduct information sessions including seminars, webinars and visits to professional bodies, associations and industry groups.

Our targeted shadow economy activities focus on:

  • protecting honest employers who comply with their obligations while addressing those employers who choose to wrongly classify employees as independent contractors
  • engaging with employers who choose to use third parties (for example, labour hire firms or payroll service providers) where they may be at risk of meeting their employer obligations
  • more targeted enforcement actions directed towards those who choose to under report or avoid obligations altogether
  • working in partnership with other government agencies, industry associations and intermediaries to promote tax and super compliance.

QC100823