SuperStream and small business superannuation payments
Under the SuperStream changes, all small business employers will need to change the way they pay their employee superannuation from the 30 June 2016. Is your small business ready?
From June 30, 2016, all small businesses with less than 19 employees will be required to make superannuation contributions with an electronic payment using a standard interface. The contributions will then be automatically paid to the individual employee funds, including SMSF’s.
Larger employers have been using SuperStream since the 31 October 2015
Most small businesses, after the transition phase, should find the new system makes payment of employee superannuation easier and more efficient, especially if you are currently making payments to multiple employee superannuation funds and are using the right software.
So how do small businesses use SuperStream? There are two main ways to use the new system; as a Superannuation Clearing House or using a SuperStream ready Accounting Software solution.
Using a Superannuation Clearing House
If you choose to use a superannuation clearing house each month or quarter, you will make a single electronic payment to the clearing house together with contribution data for your employees. The clearinghouse will then transfer the individual payments to each of your employee’s superannuation funds along with the SuperStream data.
There is a free small business superannuation clearing house, which is available to businesses with less than 19 employees that also have an aggregate business turnover of less than $2 million.
There are also several commercial clearinghouses available and clearing houses run by large superannuation funds
Using SuperStream ready Accounting Software
If you are using one of the major brands of accounting software, then there is a good chance that it is SuperStream ready. As a small business, utilising your accounting software will be the easiest way to comply with SuperStream.
Using your existing accounting software has many efficiency advantages as the contribution data required for SuperStream will automatically transfer from your payroll records without any re-entry, saving time and effort.
You need to check with your software supplier that your payroll system is SuperStream ready and covers both data and payments. If your accounting software is not SuperStream ready or covers just data only, now would be a good time to consider changing to a new accounting system.
At Bizally we believe that the best accounting software available for SuperStream and small business payroll is Xero.
What else do I have to do?
As part of the SuperStream Changes, all superannuation funds must have a Unique Superannuation Identifier (USI) that replaces the previous SPIN. It is important that you get the USI of all of your employee’s superannuation funds.
You should get all your employees to complete a new superannuation standard choice form that contains all the details you need to comply with SuperStream.
Once complete you can then enter all of the new data into your accounting software or Superannuation Clearing House.
How do SMSF’s fit into SuperStream?
Self-Managed Superannuation Fund’s (SMSF’s) are also part of the SuperStream system. If one of your employees has an SMSF, they will need to supply you with the Electronic Service Address, ABN and Bank account details for their fund.
The Electronic Service Address is unique to each SMSF and must be applied for by the Trustees of the SMSF.
Do business owners have to use SuperStream for their own contributions?
Business owners that are making contributions to their own related SMSF are exempted from SuperStream, and they can continue to make their contributions as usual.
If business owners are making a contribution to an industry or commercial superannuation fund, then they will need to use SuperStream as these funds will only accept employer contributions via SuperStream from the 30 June 2016.
SuperStream also does not apply to member personal contributions (non-employer) of business owners and these can also continue to me made as usual.
How can Bizally help you with these changes?
To many small business owners, this may all seem a little confusing. If you want to ensure that you are complying with the new rules and have set up your system correctly, or for that matter have any questions about your superannuation responsibilities as a small business, simply call us today to arrange a discussion. We can guide you through the process and ensure that are correctly fulfilling your obligations as an employer.
As Bizally specialises in small business, we can also guide you through the selection and set up a process for SuperStream ready accounting software, as well as help you coordinate with your employees to make sure you have the right data.
Author – Ben Stokes
Ben Stokes is a director of Bizally. Bizally are specialist Small Business Accountants and Business Advisors who also specialise in SMSF advice.
This article is not intended as advice and you should contact a professional advisor to discuss your specific circumstance before taking action on anything contained in this article.