Thanks to Todd Hearne from WSG Group for being our guest blogger for this article.
Over the past 6 months Accountants have been fielding numerous questions regarding the introduction of SuperStream. There seems to be a great deal of confusion within the small business community as to how the system works and which businesses it is applicable to.
In simple terms SuperStream is the way businesses must pay superannuation guarantee charges to superfunds. All businesses must pay super and send employee information electronically from the SuperStream commencement date.
Large businesses (greater than 20 employees) are already required to be SuperStream compliant. Small businesses (less than 20 employees) were required to be compliant from the 30th June 2016 however the ATO has indicated they will provide flexibility and not take compliance action on non- compliant businesses until after the 28th October 2016.
If the only contributions you make are personal contributions for yourself, or contributions to a related self managed superfund you are not required to be registered for SuperStream.
The easiest way for small businesses to be Superstream compliant is for the business to use an accounting software package that meets the SuperStream standards. All of the latest accounting software e.g. Xero / MYOB / Reckon can be updated for the use of SuperStream. This allows the small business owners to pay their employees super electronically through their own accounting software.
To be able to pay your employees super using SuperStream you will need the following information for all of your employees:
- Tax File Number
- Superfunds ABN
- Funds unique superannuation identifier (USI). A USI identifies the specific super product for an employee contribution. If ensures contributions get to the right destination.
Employees can find their funds ABN and USI on their latest super statement or by calling the fund.
If you have any employee’s with a self managed superfund the information you need is slightly different.
Note: Businesses paying their superannuation contributions electronically already still need to be SuperStream compliant. Even though you are already paying electronically, you may not be sending the funds the information about the contribution required under SuperStream.
If the businesses accounting software cannot be used the employee will be required to register with a clearing house or a messaging portal.
A clearing house pays super to your employee’s funds for you. You send a single electronic payment to the clearing house, together with the contribution data for all your employees, and the clearing house does the rest. The ATO has a free clearing house option that is quick and simple to use. You can also choose from several commercial options, or your superfund may have a clearing house you can use.
One problem that employee’s seem to be facing is employees not providing them with the details needed to complete the registration. If an employee does not provide you with the details you may be able to redirect the employee’s contributions to your default superfund.
With the final deadline for SuperStream registration fast approaching I would encourage all business owners to ensure they understand their obligations surrounding SuperStream and if there is any confusion speak to your accountant.