2023–24 super guarantee gap estimate
For 2023–24 we estimate a net super guarantee (SG) gap of around $7.2 billion or 6.1% of estimated theoretical SG liability. This means approximately 94% of the total theoretical SG liability is expected to be collected.
Our current gap estimate is based on findings from our random enquiry program (REP) for the 2022 financial year. This is the third year of applying a bottom-up approach methodology to estimate the SG gap. See Findings from the REP.
Theoretical contributions represent the amount of SG we estimate should theoretically be collected on behalf of employees. It increases with wages in the economy, our estimation of unreported contributions, and is sensitive to changes in legislation. In the 2023–24 year, theoretical contributions continued to grow due to an increase in the statutory minimum rate to 11%.
|
Element |
2015–16 |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
|---|---|---|---|---|---|---|---|---|---|
|
Population |
859,479 |
871,272 |
873,210 |
857,337 |
903,261 |
1,017,939 |
1,003,474 |
1,011,402 |
1,020,047 |
|
Theoretical tax |
59,214 |
61,044 |
63,911 |
66,074 |
70,992 |
73,482 |
81,997 |
105,916 |
119,118 |
|
Voluntarily reported |
55,061 |
56,738 |
59,393 |
61,420 |
65,903 |
67,812 |
75,809 |
98,285 |
110,610 |
|
Add amendments |
232 |
464 |
531 |
557 |
463 |
442 |
666 |
1,044 |
1,258 |
|
Total reported |
55,620 |
57,454 |
60,187 |
62,222 |
66,539 |
68,419 |
76,694 |
99,636 |
112,204 |
|
Subtract long-term non-payment |
327 |
252 |
263 |
245 |
173 |
165 |
219 |
307 |
336 |
|
Expected collections |
55,293 |
57,202 |
59,924 |
61,977 |
66,366 |
68,254 |
76,475 |
99,329 |
111,868 |
|
Net gap ($m) |
3,921 |
3,841 |
3,987 |
4,098 |
4,626 |
5,228 |
5,522 |
6,586 |
7,250 |
|
Net gap (% of theoretical tax) |
6.6% |
6.3% |
6.2% |
6.2% |
6.5% |
7.1% |
6.7% |
6.2% |
6.1% |
|
Assessment gap ($m) |
3,594 |
3,589 |
3,724 |
3,853 |
4,453 |
5,063 |
5,303 |
6,279 |
6,914 |
|
% of theoretical |
6.1% |
5.9% |
5.8% |
5.8% |
6.3% |
6.9% |
6.5% |
5.9% |
5.8% |
|
Payment gap ($m) |
327 |
252 |
263 |
245 |
173 |
165 |
219 |
307 |
336 |
|
% of theoretical |
0.6% |
0.4% |
0.4% |
0.4% |
0.2% |
0.2% |
0.3% |
0.3% |
0.3% |
|
Gross gap ($m) |
4,153 |
4,305 |
4,518 |
4,655 |
5,089 |
5,670 |
6,188 |
7,630 |
8,508 |
|
Gross gap (% of theoretical tax) |
7.0% |
7.1% |
7.1% |
7.0% |
7.2% |
7.7% |
7.5% |
7.2% |
7.1% |
Figure 1 shows the gross and net gap as a percentage over a 9–year period. The 2020–21 year has the highest gross and net SG gap estimates over this period. We have now seen consecutive years of reducing gap, both gross and net, approaching pre-COVID-19 levels.
Figure 1: Gross and net gap percentage – super guarantee, 2015–16 to 2023–24
The random enquiry program
In our random enquiry program (REP), we randomly select and profile a sample of employers. We estimate the gap by using the incidence rate of adjustments and mean value of amendments resulting from non-compliance. Adjustments refer to changes we make to items on a tax return to correct errors identified in the audit and review process.
This method provides insights into the:
- value of non-compliance
- proportion of the sample, and by extension the population, who are incorrectly reporting.
Findings from the REP
In 2021–22, we undertook 668 REP audits and reviews across a representative sample of the active employer's population. These cases informed our 2023–24 financial year estimate.
During the selection process, we stratified the population by large and non-large pay as you go (PAYG) withholders, to ensure the overall population was appropriately represented. Employers considered at higher risk of shadow economy behaviour were represented as well as employers with lower risk of shadow economy behaviour.
In the sample, the incidence of adjustment was 41%. The median increase to employers' SG contributions was approximately $8,000. While individually this amount may not be large, it is extrapolated across a population of over 1 million employers.
What is driving the gap
As this is the third year we have utilised this method, we don't have contemporary insights into what might be driving the trend in the gap. However, case intelligence has been gathered allowing us to capture qualitative data that is highly valuable in understanding client behaviour.
The most common non-compliance incidents identified from the REP were:
- late SG payment
- SG non-payment or underpayment
- super guarantee charge (SGC) non-payment
- incorrect application of the law.
For previously published tax gap figures, see Australian Tax Gaps – Data.gov.au External Link