Global Employer Services update

Key developments shaping employer compliance 

• The ATO has identified Fringe Benefits Tax as a major compliance focus for 2026, with particular scrutiny on motor vehicles and commercial vehicle classifications. Employers should review logbooks, private‑use positions and supporting evidence to ensure they can withstand increased audit activity.
• ATO returns 1.1 billion in unpaid super and intensifies compliance action
  Nearly one million workers received unpaid superannuation in FY25 following more than 15,000 audit cases, substantial Superannuation Guarantee Charge liabilities and more than 200 million in penalties. With PayDay Super commencing in July 2026, employers should ensure payroll systems and processes are configured for timely and accurate SG payments.
• New ATO process for penalty remission requests
  From 22 January 2026, employers must lodge remission requests for general interest charges, shortfall interest charges and failure to lodge penalties via new approved forms. The ATO will no longer accept phone or email requests. This process change forms part of a wider review by the Tax Ombudsman and reflects a stronger, more formalised approach to penalty administration.
   

Global Employer Services update - Transcript

Welcome to RSM’s latest Global Employer Services update. 

 FBT Focus for 2026 Announced by ATO  

The ATO has announced FBT to be a focus area for the 2026 year which is likely to lead to an increase in audit activity in this area. It appears the ATO will focus on motor vehicles, particularly commercial vehicles. For more details, we recommend taking a look at our recent thought leadership piece on this. 

 Statutory review of the electric car discount 

The Government has released the terms of reference for the statutory review of the Electric Car Discount. The purpose of the review is to assess how effective the Electric Car Discount has been in encouraging the uptake of zero or low‐emission vehicles in Australia and in contributing to national emissions reduction objectives. The review is seeking evidence and analysis to address three key questions.  

First, it aims to assess whether the tax exemptions have increased the adoption of zero or low‐emission vehicles, how influential these concessions have been, what impact they have had on early adopters, charging infrastructure and the broader growth of the market. Second, it will examine how the eligibility criteria for particular vehicle types have affected the uptake of zero or low‐emission vehicles. Third, to ascertain any additional evidence relevant to the ongoing operation of the Electric Car Discount for eligible vehicles. For businesses, it is crucial to remember is that this will affect electric vehicle fringe benefits tax exemption application and tariff exemptions for eligible electric vehicles. 

 ATO return $1.1 Billion in super in FY25 

The ATO has returned $1.1 billion in unpaid superannuation to nearly one million workers in FY 2025 as it intensified superannuation compliance efforts. This was partially driven by the ATO issuing over 200,000 reminders and prompts, raising almost $800 million in Superannuation Guarantee Charge liabilities, and applying more than $200 million in penalties to non‐compliant employers.

As part of this, over 15,000 audit cases were initiated.

The success of these efforts is largely attributed to near real-time data capture through single touch payroll and superannuation fund data.

This success will likely be compounded by the initiation of PayDay Super in July meaning its more important than ever to review your current payroll configurations. 

ATO Updates on Penalty Remission - PS LA 2007/22

The ATO has released an updated version of Practice Statement PS LA 2007/22. Effective from 11 December 2025, the change is designed to refine its approach to remitting penalties for failing to withhold. The revised guidance aligns more closely with other ATO penalty‐remission policies and emphasizes that remission will now only be granted in exceptional circumstances, based on a detailed assessment of the payer's individual situation. Factors to be considered include the payer's compliance history, the reasons for the withholding failure, how the ATO became aware of the issue and whether the payer is able to recover the penalty amount.

ATO Child Support Data Acquisition

The ATO has announced it will acquire child support data from Services Australia for the 2025 to 2027 income years, covering up to 300,000 individuals annually. The data will be matched against ATO records to identify taxpayers requiring administrative or compliance action and to report enforcement outcomes back to Services Australia. Given the impact on individuals, employers should ensure payroll records are accurately reported to the regulators.

Indexation of Government payments in January 2026

From 1 January 2026, a range of Government Payment rates and thresholds have been. As a result, businesses may need to review and adjust any pay calculations or systems that rely on these indexed amounts to ensure they remain accurate and compliant.

Home expense deductibility case appealed

The first COVID‐19 case on the deductibility of home occupancy expenses, Hall v FCT [2025] ARTA 600, has proceeded to the Federal Court after the ATO appealed an ART decision in favour of the taxpayer, Mr Ned Hall. The ART held that Mr Hall could deduct a portion of his rent for a spare bedroom used to perform the majority of his duties during lockdowns, finding he had no practical alternative but to work from home. This could potentially be seen before the Full Federal Court in April 2026 and may become a test case, offering broader guidance on the long‐standing "necessity" and "exclusive use" tests for occupancy deductions. Further, this has possible implications beyond COVID‐19. The outcome may also affect homeowners due to the CG main residence exemption consequences where occupancy deductions are available.

Additionally, the ATO has issued an update to the Employees guide for work expenses for taxpayers usage. 

 Former ANZ chief Shayne Elliott sues for breach of contract 

Former ANZ chief executive Shayne Elliott has launched legal action against the bank after it withheld $13.5 million in bonus payments following his retirement in 2025. Elliott claims ANZ breached a “clear, unambiguous agreement” governing his exit terms, arguing he was left with “no alternative” but to commence proceedings in the NSW Supreme Court. ANZ says it will defend the matter vigorously, stating the board had deliberately reduced executive bonuses in response to significant misconduct issues and regulatory penalties incurred during Elliott’s tenure, including a $240 million civil penalty and additional capital requirements. Current and former executives collectively lost about $32 million in bonuses as part of the board’s accountability measures.

Gender Pay Gap Controversy in Queensland

Queensland not for profit Youturn Limited attempted to address its gender pay gap by cutting the salaries of three long serving male case managers by $10,000. The organisation had sought to reclassify the men from Level 5 to Level 4 under the SCHADS Award despite no change in duties, a move the employees rejected. Commissioner Jennifer Hunt criticised the approach as an improper method of achieving pay equity, stating that gender fairness cannot be achieved by lowering men’s pay and breaching existing contractual arrangements. As a result, it amounted to repudiation of contract and allowed them to pursue unlawful termination cases.