Explanatory Statement
Taxation Administration – Single Touch Payroll – Exemption for Employers from Reporting Contribution Amounts Paid to a Superannuation Fund
General Outline of Instrument
- This instrument is made under subsection 389-10(2) of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953).
- This instrument exempts all employers reporting under Single Touch Payroll from reporting contribution amounts paid by them to a complying superannuation fund or retirement savings account (RSA).
- The instrument is a legislative instrument for the purposes of the Legislation Act 2003.
- Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
Date of effect
5. The instrument commences on 1 July 2018.
6. Subsection 12(1A) of the Legislation Act 2003 provides that a legislative instrument may commence before the instrument is registered.
What is this instrument about
7. Division 389 of Schedule 1 to the TAA 1953 established Single Touch Payroll reporting.
8. That Division provides for both mandatory, section 389-5 of Schedule 1 to the TAA 1953, and voluntary, section 389-15 of Schedule 1 to the TAA 1953, reporting of employee payroll and superannuation information by employers.
9. Employers reporting under Single Touch Payroll are required to report either the cumulative employee ordinary time earnings amount or cumulative employee super liability amount each pay period. This enables an estimate to be made of the superannuation guarantee entitlement for each employee.
10. The Single Touch Payroll legislation also required employers to report the payments made to superannuation funds or RSAs on behalf of their employees. This requirement was difficult to implement as superannuation payment reporting is not part of the payroll reporting business process for an employer.
11. Subsection 389-10(1) and (2) allows the Commissioner of Taxation by legislative instrument to exempt a class of entities from reporting certain amounts under Single Touch Payroll.
12. This instrument exempts an entity from reporting contribution amounts paid to a superannuation fund under Single Touch Payroll under subsection 389-5(1) (Item 3).
13. From 1 July 2018, superannuation payment recipients were required to report the member contribution amounts made by an entity to a superannuation fund or RSA under the Member Account Transaction Service (MATS) reporting regime.
14. MATS reporting provides the contribution amounts paid by employers for employees to the ATO when the amounts are received by the superannuation fund or RSA.
15. MATS reporting is a more accurate way for this information to be provided to the ATO. It provides the Commissioner of Taxation with the information necessary to monitor employer superannuation guarantee payments.
16. The ATO now receives this information via MATS reporting, there is no need for employers to also report it via Single Touch Payroll reporting.
17. This instrument ensures there is no double up in the reporting obligation of these amounts for employers.
What is the effect of this instrument
18. An entity reporting under Single Touch Payroll is exempted from reporting contribution amounts paid to superannuation funds or RSAs.
19. The instrument is not detrimental to anyone including the Commonwealth.
20. An assessment of the compliance cost impact indicates that there will be minimal impacts on both implementation and ongoing compliance costs. The impact of the legislative instrument is minor in nature.
Consultation
21. The rule specified in this instrument has been developed in consultation with payroll software developers, the superannuation industry and bodies representing employers.
22. The ATO has been consulting with the superannuation industry since December 2016 to co-design the MATS reporting regime.
Legislative references:
Acts Interpretation Act 1901
Taxation Administration Act 1953
Legislation Act 2003
Human Rights (Parliamentary Scrutiny) Act 2011
Statement of Compatibility with Human Rights
This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Taxation Administration - Single Touch Payroll – Exemption for Employers from Reporting Contribution Amounts Paid to a Superannuation Fund
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The instrument provides an exemption for employers reporting through Single Touch Payroll from reporting contribution amounts paid to superannuation funds.
Human rights implications
This legislative instrument does not engage any of the applicable rights or freedoms because the new instrument is of a minor or machinery nature. The exemption removes the obligation for employers to report contribution amounts paid to a superannuation fund or retirement savings account through Single Touch Payroll.
Conclusion
This legislative instrument is compatible with human rights as it does not raise any human rights issues.