In Australia, the importance of timely superannuation payments cannot be overstated, especially for directors, who bear significant responsibilities and liabilities. AI and automation helps directors to mitigate these risks.
Presented by Yellow Canary
Director liabilities for unpaid superannuation
Australian law has long held company directors personally liable not only for their actions and those of their organisations, but also for oversights in fulfilling compliance obligations.
If superannuation contributions are not paid by the due date, directors can receive a director penalty notice from the Australian Taxation Office (ATO) making them personally liable for the unpaid amounts. This liability extends to penalties and interest, further compounding the financial impact on directors.
The risks and consequences of non- compliance are substantial, highlighting the critical need for effective and efficient management of superannuation obligations.
The financial and reputational burden of superannuation non-compliance
When businesses fail to pay the correct superannuation on time, the repercussions can be numerous and severe. Businesses must repay outstanding superannuation amounts with interest and often incur significant costs by hiring accounting firms to generate and submit late payment forms to the ATO. These additional costs, along with penalties, can significantly strain company finances.
Late superannuation payments can also damage a company’s reputation, erode employee trust and lead to further scrutiny from regulatory bodies. The longer the issue persists, the more difficult and expensive it becomes to rectify, making proactive compliance a critical concern for directors.
The role of AI and automation in superannuation compliance
Directors must take an active role in ensuring superannuation compliance is effectively managed. Start by asking your CFO how they’re handling this critical responsibility — are they utilising the latest technologies?
AI and automation are transforming compliance, making it more efficient, scalable and reliable. Yellow Canary’s Superannuation Compliance tool offers a complete solution for superannuation guarantee liability provisioning, as well as late payment management and submissions. It enables finance leaders to quickly compare offset and carry-forward strategies, automatically generating ATO statements and reducing manual effort.
By adopting AI-driven solutions, directors can achieve enhanced visibility into their compliance framework, reduce financial risks and protect themselves from personal liability. In a complex regulatory environment, leveraging advanced tech is not just beneficial — it’s essential.
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