What Recent Payroll Changes Mean for Taxpayers
Recent rulings show that breaches of the Fair Work Act or payroll obligations can have enormous financial consequences. With major corporations paying hundreds of millions of dollars in remediation costs and record fines for unlawful actions, the message is clear: regulators are taking wage compliance seriously.
For everyday taxpayers, this means stronger protections if you suspect underpayment or incorrect entitlements. A significant court decision recently found Uber liable for payroll tax in New South Wales, overturning an earlier ruling. This outcome highlights the growing uncertainty around contractor arrangements, especially in the gig economy.
For workers, it could mean closer alignment with employee entitlements over time. For small businesses, it serves as a warning that state revenue offices are increasing audit activity and may conduct reviews stretching back several years.
The ATO is pressing forward with Payday Super, a system requiring super contributions to be paid at the same time as wages. Real-time payment capability is already in place which will improve transparency and ensure employees’ retirement savings are received without delay. Taxpayers should monitor their payslips and super accounts regularly to confirm contributions are made on time. Employers, meanwhile, must prepare payroll systems early to avoid compliance issues.
New legislation prevents penalty rates and overtime entitlements from being reduced under modern awards. This is particularly relevant for employees in retail, hospitality, and care sectors, where non-standard hours are common. For workers, it means stronger safeguards for weekend and public holiday pay. Employers must review payroll systems carefully to ensure all entitlements are being correctly calculated.
The ATO has also made some other updates that tax payers and employers should look out for, including:
- The ATO has clarified what counts as Ordinary Times Earnings, providing clearer rules on which payments attract superannuation contributions.
- Data-matching programs are being expanded to detect fraud and ensure accurate reporting.
- The electric vehicle fringe benefits tax exemption is under review after proving more costly than forecast. This could affect future access to this benefit.
The compliance environment is becoming more complex, but the overall trend is positive for workers. Australians can expect stronger protections around wages and superannuation, while businesses face increased responsibility to keep payroll systems accurate. Staying informed and regularly checking your entitlements is the best way to protect yourself in this evolving landscape.
