Unpaid Employee Superannuation

Unpaid Employee Superannuation

Recent data collected by Industry Super Australia (ISA) has found that $5 billion in super was not recoverable for workers in the 2018/19 income year. It also claimed the ATO could do more to help employees recover their unpaid super as, on average, only 12% of missing superannuation was recovered over the period of FY2014 to FY2018. The full report can be accessed here.

Where an employee is unable to directly work with the employer to resolve and recover the unpaid super, they can lodge an enquiry with the ATO using the ATO’s online tool. The ATO will then conduct the relevant investigation and confirm whether there is a case for their unpaid super against the employer.

ISA is calling upon the government to do more and has made the following recommendations:

  • Make it compulsory to pay super on day that the employee is paid;
  • Give the ATO more power to enforce more rigorous penalties for employers not doing the right thing;
  • Give other agencies (i.e. Fair Work Ombudsman) the power to communicate with the ATO to help recover unpaid super;
  • Extend the notion of “Fair Entitlements Guarantee” to super – meaning it can also be recovered in the same way as leave entitlements on an employer’s insolvency.

This report from ISA will no doubt motivate the government to make super payment rules stricter for employers going forward. Please be reminded that employer super (Superannuation Guarantee) is due on or before 28 days after the ending of each business quarter. Ensure you pay your employees’ super on time to ensure you get a tax deduction for the superannuation payment and to avoid having the ATO investigate your business or impose super penalties. Also, with Single Touch Payroll (STP) now live, and required to be filed by all employers in Australia (effective from 1 July 2021), the ATO now has more live data and access to your employees’ entitlements including the superannuation amount due.

If you need help with managing the quarterly super for your employees, please do not hesitate to contact us.

Kreston Stanley Williamson

Author – Quang Tat

*Correct as of 3 February 2022

*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.

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