ATO outlines compliance tips for employers as it seeks to bring down $50 billion in unpaid tax
Employers across Australia are being urged to take "small practical steps" to remain on top of their compliance duties and start the year strong.
Australian Taxation Office (ATO) assistant commissioner Angela Allen said the new calendar year is the perfect time for small businesses to reset their habits and avoid compliance actions.
"Part of the $27.2 billion small business income tax gap is driven by mistakes, so it's important to be aware of the ATO's small business focus areas and if you're unsure seek support early," Allen said.
"Taking just a few small practical steps now can make a huge difference, whether it's putting funds aside to cover GST and PAYG withholding, staying on top of ATO debts, or setting calendar reminders for lodgement due dates."
Practical steps for compliance
According to the assistant commissioner, keeping separate bank accounts for Goods and Services Tax (GST) and collected PAYG withholding will prevent employers from dipping into these funds to bolster cash flow.
"While using these amounts to fund your business may feel like a short-term fix, it creates much bigger problems down the track and makes it harder to recover when your obligations are due," she said.
She also encouraged employers to go digital when it comes to recordkeeping instead of staying with the "shoebox" method.
"Accurate, consistent, and complete recordkeeping isn't just a good idea – it's a requirement," Allen said.
Employers risk firmer recovery actions if they don't stay on top of their tax debts, according to the ATO official, who urged businesses to seek help if they need it.
"It's about setting your business up for success and if for some reason you can't pay in full or on time, our number one tip is to not stick your head in the sand," she said.
"The ATO is not a bank or a cheap source of finance. Deliberately delaying tax payments to fund your business creates an unfair advantage over the many small businesses that are doing the right thing and paying on time."
Preparing for super payments
Allen's suggestions come ahead of a major shake-up in Australia's super system. Starting in July, employers will be required to pay employees their superannuation guarantee each payday.
The assistant commissioner said businesses should start planning ahead of the major reform.
"Review your payroll systems and super processes and get ready to pay super guarantee more frequently," she said.
The ATO has been taking steps to bring down the $50 billion in unpaid tax, including taking action against taxpayers who refuse to pay unpaid employee superannuation, as well as taxes withheld from wages or collected from customers.
In January, the ATO said it has issued 21 departure prohibition orders since July 2025 to prevent people with tax liabilities from leaving Australia without paying their outstanding tax.
