Sometimes, running a small business in Australia is complex what with the volume of ongoing and ever changing regulatory landscape. It can be a mindfield! One area that isn’t getting a lot of publicity lately is the up coming changes to Super Stream and the effect on small business.
If you employ people (or know somebody who does), you need to make sure you’re compliant with Super Stream by 1 July 2015 or you might find yourself in a bit of hot water.
“What is Super Stream?”
In simple terms, Super Stream has been designed to ensure that all superannuation paid on behalf of your employees is now paid through an electronic clearing house and that certain data is also provided electronically in a specific format.
Now, the standard has been around since 1 July 2014 but if you are a small business, it is likely you’ve not really noticed or understood what the big deal was as it wasn’t yet relevant to you. This is because it was only mandatory to be compliant with these changes from 1 July 2014 if you had 20 or more employees. Being a small business, you may have continued to pay your super by cheque or BPAY for each employee.
Now things are changing for small business. If you employ less than 20 people, you need to make sure you’re compliant by 1 July 2015, which means your next super payment must be made using a Super Stream compliant method.
How on earth do you make sure you’re Super Stream compliant?
It can be really easy to make sure you’re compliant, you only need to use one of the following three options. Make sure you choose the option below that best suits your business needs:
1. Small Business Clearing House
Provided you employ 19 or less employees at any one time, you can use the ATO Small Business Clearing House.
It is a free service, simple to use, and easy to setup. Best of all, your super funds are counted as being paid as soon as the Clearing House receives your payment. This means that you can pay your super obligations on the day due and not need to make allowances for extra days for clearing to the super fund (eg your 30 June payments).
Register for your ATO super clearing house by completing the form here.
Once setup you’ll receive an email confirmation where you can create a password. Note down your user ID and password in a safe place so that you can use it every quarter when your super is due.
Before making your first payment, make sure you setup:
– Your Bank account details
– Your employee details
Helpful tip: Make sure you click to receive the automated email alerts and reminders so that you will always remember when your super payments are due! Pretty useful right?
2. Use the Clearing House of your Employer Default Super Fund (if you have one).
If you have your own Employer Default super fund they will have a clearing house that is often free to use.
You will need to contact your Default Super fund and find out how to use their clearing house, and what fees (if any) there are to use it. By using their super clearing house, you’ll be compliant.
Make sure you ask them when your super has been “declared” as paid. That is, if it is similar to the ATO Small Business Super Clearing and once the super is received by the clearing house, it is deemed to be “paid” or if it is when the clearing house sends to the individual super funds. If the latter, find out what time frame they guarantee funds to be transferred. This is particularly important because super payments are should never be paid late.
3. Use the Super Clearing House in Xero
If you have Xero Premium 10 subscription or higher, Automated Super is included in your Xero subscription. This automated super requires a once off setup of completing the online registration form (Logon to your Xero file and go to Payroll / Superannuation). You’ll receive a confirmation email and then you’re ready to go.
With just a click of the button, you can prepare your superannuation payments direct from Xero saving time and effort (because the Super information is being automatically pulled from the integration of your payroll data and Xero employee file). Beautiful Accounting right?
And like the ATO Small Business Clearing House, once the clearing house receives the funds, it is deemed to be paid.
The other beautiful thing about the Xero Super Clearing House is that you don’t need to move if you ever do employ more than 20 people. You just keep using the service system.
Forgotten how much Super to pay?
Superannuation guarantee charge rates can change from year to year, so double check you’re complying by checking our quick super rates guide.