ATO urges employers to tighten payroll controls to stay compliant

The Australian Taxation Office (ATO) urges employers to strengthen payroll governance to meet their tax, reporting, and superannuation obligations and avoid compliance risks.

By Ro Elvinia

The revenue collection agency advises both domestic and international businesses operating in Australia to establish payroll systems and processes that align with their structure, size, and industry. They highlighted in their recent article that effective payroll governance ensures compliance with Pay as You Go (PAYG) withholding, Single Touch Payroll (STP), Fringe Benefits Tax (FBT), and Superannuation Guarantee (SG) requirements.

Additionally, the ATO warns that weak payroll governance exposes employers to administrative errors, employee fraud, cybercrime, and significant penalties. The agency encourages businesses to maintain accurate records, review payroll systems regularly, and keep payroll and accounting staff updated with the latest payroll regulations and technology.

In its latest guidance, the ATO identifies several common payroll mistakes that lead to rejected payments, incorrect reporting, and unexpected liabilities. These include:

  • Entering incorrect employee or employer details such as names, dates of birth, ABNs, or superannuation account information
  • Using tax file number (TFN) exemption codes incorrectly, particularly when employees turn 18
  • Reporting under the wrong ABN or payment reference number (PRN)
  • Failing to reconcile PAYG withholding amounts at year-end, which can create substantial debts and penalties

The ATO instructs employers who use third-party payroll service providers to ensure that the provider reports under the correct ABN, pays PAYG withholding on time, and maintains clear communication and accountability.

ABN Australia’s payroll services

International employers often find Australia’s payroll and compliance framework complex. ABN Australia helps international businesses manage payroll operations and meet ATO requirements efficiently.

We deliver cloud-based payroll and bookkeeping solutions for small to medium-sized international businesses operating in Australia. Our experienced team manages payroll functions, ensures compliance with Australian employment and superannuation laws, and helps employers pay staff accurately and on time. We also assist businesses in implementing modern payroll systems tailored to the Australian market, strengthening payroll governance and improving transparency.

You can visit the ATO’s website for detailed payroll governance guidance. To improve payroll governance, reduce compliance risks, and streamline payroll operations through secure cloud-based systems, contact ABN Australia for expert payroll management solutions tailored to your international business in Australia.

Published: 11th Nov  2025 | Last updated: 11th Nov 2025

About the Author

Ro Elvinia is ABN Australia's Customer Success and Marketing Manager. She holds a bachelor’s degree in mass communication, majoring in journalism, and also has an academic background in civil engineering. With over a decade of experience in professional writing and a background spanning journalism, Australian immigration, and business services, Ro brings a unique mix of communication and analytical expertise. She works closely with international clients and contributes to ABN Australia's content strategy, helping global businesses stay informed and confident as they navigate the Australian market.