Can the ATO contact my employer?

What the ATO already knows about where you work

Since Single Touch Payroll, every employer reports wages, tax withheld and super to the ATO each pay cycle. That is where your pre-filled income comes from, and it means the ATO does not need to contact anyone to find out who employs you. Your employer is on file, with an address for notices, from your first payslip.

Knowing where you work is not the same as talking to them. Tax information is protected by strict secrecy laws, and ATO staff cannot discuss your affairs with a third party without a legal basis. In the debt context, that legal basis is the garnishee notice.

When and how the ATO contacts an employer

A garnishee notice to an employer is a firmer action step. It follows an overdue debt, unanswered reminders and usually a warning letter. The notice goes by post, marked private and confidential, and it contains:

• Your name and enough detail to identify you on the payroll.
• The amount of the debt the notice relates to.
• The percentage or amount to deduct from each pay, and where to send it.

It does not contain your tax history, the reason for the debt, or any commentary. The employer is told what to deduct, not why. The employer must comply, and becomes liable for the amount if it does not. The ATO's policy is not to seek more than 30% of net wages in most cases, so your employer will typically see a 30% deduction instruction.

There are a couple of other legitimate reasons for ATO contact with an employer: checking the employer's own super and PAYG withholding compliance, or a formal information request during an audit. Neither is about collecting your debt, and neither involves discussing your debt with them.

What it means for you at work

For most people the worry is embarrassment rather than money. Some perspective helps.

1. Payroll teams process garnishees from the ATO, courts and child support regularly. The notice is a legal instruction to them, not a character reference about you.
2. The deduction appears on your payslip, so it is visible to whoever handles pay, but not to colleagues.
3. The whole thing is avoidable and reversible. A payment plan that you keep normally prevents a notice being issued, and the ATO may withdraw or vary one once suitable arrangements are in place.

The ATO's tools reach income and money first, which is why employer notices come well before anything involving property or court. Our guide to what the ATO can reach shows the order. If you have received a warning letter and want to keep your employer out of it, that letter is the moment to act.

What to do next

1. If you have an overdue debt and have had a warning letter, contact the ATO or get help before an employer notice is issued.
2. If a notice has already gone to your employer, ask payroll for a copy and check the percentage and the debt figure.
3. Put a realistic payment plan proposal to the ATO on 13 11 42 and ask for the notice to be withdrawn or varied once it is accepted.

More questions: 21 What the ATO can and can't do questions answered · Full guide: Can the ATO take my house?