Australian employers failed to pay their workers A$5.2 billion of their superannuation (super) entitlements in the 2021/22 financial year, according to the Australian Taxation Office (ATO).
The ATO estimated the superannuation guarantee (SG) gap at 6.3% of the total theoretical SG liability, meaning it expected to collect 94% of the liability.
Australia has a compulsory superannuation (known as pension in some other countries) system under which employers are required to contribute a percentage (currently 11.5%) of an employee's earnings into their super fund to help them save for retirement.
The mandatory system has grown to make Australia’s superannuation industry the fifth largest of its type in the world with $3.9 trillion under management.
The ATO, Australian Government’s main revenue collection body, said the most common non-compliance incidents identified were late lodgement, SG underpayment, SG charge non-payment and incorrect application of the law.
The SG gap percentage was the same as in in 2019/20 but higher than 5.9% in the three previous financial years.
The ATO said it did not have insights into what might be driving the trend in the gap as this was the first year it had utilised a bottom-up methodology under its random enquiry program (REP).
“We're committed to actively reducing non-compliance and improving willing participation by employers in the super guarantee system,” the ATO said in a statement.
It was focused on reducing non-compliance by helping employers get it right, correcting employers who do not get it right, and helping employees understand their entitlements.