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.
These behaviours are driven by a range of factors, including:
- businesses experiencing cash flow pressure
- employers deliberately being non-compliant for personal gain such as improving liquidity, cash flow and competitiveness
- employer and representatives' lack of awareness or understanding of single touch payroll (STP) obligations and penalties and associated PAYG withholding payment obligations
- inadequate governance or payroll practices which causes incorrect withholding, reporting and payment.
We focus our efforts in the following 2 main areas. We use:
- prevention activities to help employers get things right and deal with genuine mistakes
- 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 PAYG withholding 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 in our communications to help improve employer understanding and voluntary compliance
- conduct information sessions including seminars, webinars and visits to professional bodies, associations and industry groups.
We take firmer action to address non-compliance among higher risk employers, such as reviews, audits and the application of penalties where appropriate.
We also target shadow economy activities focused on:
- engaging with employers who choose to use third parties (for example, labour hire firms or payroll service providers) where they may not be 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.