Draft Practical Compliance Guideline PCG 2025/D5 Payday Super – first year ATO compliance approach
The Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, CPA Australia, the Institute of Certified Bookkeepers, the Institute of Public Accountants, the SMSF Association and The Tax Institute (together, the Joint Bodies) write to you as the peak professional accounting, bookkeeping, tax, financial advice and superannuation bodies in Australia. We welcome the opportunity to make a submission to the Australian Taxation Office (ATO) regarding its consultation on PCG 2025/D5 (PCG 2025/D5, the PCG, or the draft PCG, as applicable).
PCG 2025/D5 outlines the ATO’s proposed compliance approach for the first year of the Payday Super reforms, which require employers to pay superannuation guarantee (SG) contributions at the same time as salary and wages from 1 July 2026. Under PCG 2025/D5, the ATO will assess employer compliance risk based on whether contributions are made on time and in full, categorising employers into low-, medium-, or high-risk zones. Employers who make genuine efforts to comply and promptly correct errors will generally be considered low-risk and not subject to compliance action up to 30 June 2027, while those with unresolved SG shortfalls may face investigation by the ATO.
The Joint Bodies appreciate the opportunity to comment on PCG 2025/D5 and support the ATO’s risk-based compliance approach for the first year of Payday Super. Given the scale of change and reliance on third-party systems, we strongly recommend extending the transitional compliance period and providing clearer guidance on key concepts such as ‘reasonably practicable’ and Voluntary Disclosure Statements (VDSs). We also propose the introduction of ATO-led nudge messaging to assist employers in understanding SG payment timing and system performance during the transition year.
Our detailed response and recommendations are contained in Appendix A. Additional comments on VDSs and nudge messaging are contained in Appendix B.