Failing to Pay Super - ATO’S New Powers & New Penalties - JHK Legal Commercial Lawyers

28 February 2019

Failing to Pay Super – ATO’S New Powers & New Penalties

An increasing number of Australian companies are failing to pay their employees superannuation. As a result, new legislation was passed in December 2018 giving the Australian Taxation Office (“ATO”) increased powers to direct business owners to pay unpaid superannuation.

ATO’s New Powers

The ATO’s new powers include:

  1. Ordering a business owner to pay an outstanding superannuation guarantee amount; and
  2. Directing business owners to undertake educational courses in respect to their obligations to pay superannuation.

This adds to the ATO’s existing powers to recover outstanding superannuation, including the ability to issue Director Penalty Notices and charge late payment fees.

The ATO will use technology to track business owners who fail to meet superannuation and PAYG tax obligations.  The introduction of single touch payroll will apply to all Australian businesses by 1 July 2019, and means that business owners will be required to report salary as well as superannuation payments to the ATO in real time.

An amnesty to allow business owners to make up any missed payments will end in May 2019.

New Penalties

Under the new legislation, a business owner who fails to comply with the ATO’s direction to pay superannuation can face the following penalties:

  1. A fine of up to $10,500.00; or
  2. 12 months imprisonment.

Further Consequences of New Legislation

With the ATO’s new powers, it is becoming increasingly more aware of each business owner’s compliance with their superannuation obligations.

As a result, we are likely to see the ATO issue an increased number of Director Penalty Notices for unpaid superannuation moving forward.

Due to the changes in legislation we expect to also see a shift in the burden of chasing unpaid superannuation from employees, who have traditionally reported outstanding amounts to the ATO.


If you require further information about the new legislation or are having difficulties paying superannuation and require advice, please contact JHK Legal on the below numbers and emails:

Belinda Melton:

JHK Legal Brisbane office
Phone:(07) 3859 4500

JHK Legal Sydney office
Phone: (02) 8239 9600

JHK Legal Melbourne office
Phone: (03) 9927 3600

JHK Legal Sunshine Cost office
Phone: (07) 5452 7300

Lawyer, Belinda Melton