Super guarantee "nudge letters" from the ATO were in the spotlight at a Senate Economics Committee hearing on 28 October. Some tax professionals say small business owners have received letters that appear to be wrong. If you employ staff, it is worth knowing what these letters are and how to respond.

What the letters say

According to Accountants Daily, one letter is headed "Your data shows you may not have met your quarterly super guarantee (SG) obligations". It says the ATO's view is based on Single Touch Payroll data you reported and data reported by your employees' super funds. A restructuring expert told the publication they had seen more than 30 examples.

What the ATO says

An ATO spokesperson told Accountants Daily that a nudge letter is not an assessment of super guarantee and does not impose penalties. It does not automatically lead to an audit, and the ATO says it does not issue automated super guarantee assessments or penalties. The ATO also confirmed that if super is later found to be unpaid, the super guarantee charge, including penalties of up to 200 per cent, may apply. At the hearing, politicians questioned how the data matching works. The ATO says it is not what is being described, and some of the questions were taken on notice.

So the letter is a prompt to check your records, not a bill. It is still not something to ignore.

What to do if you receive one

  • Do not panic, and do not ignore it. Note the date and any response deadline in the letter.
  • Compare the numbers. Match your pay runs to the super payments your employees' funds actually received.
  • Check your STP reporting. Wrong amounts, or payments reported against the wrong period, are a common source of mismatches.
  • Find your proof. Gather payment confirmations, clearing house reports and fund receipts.
  • If the letter is wrong, say so. Contact the ATO or your tax agent with your evidence.
  • If super really is short, act early. Paying the shortfall promptly and disclosing it is likely to leave you in a better position than waiting for an audit. Talk to your accountant first so it is done correctly.

Stay ahead of it

Under payday super, super must reach the fund within 7 business days of payday, so gaps show up faster than they used to. Reconcile each pay run, keep your records tidy, and make sure employee fund details are current.

This article is general information only and does not take your circumstances into account. Check the ATO website or speak to a registered tax professional about your situation.