October 31 is a hard deadline for employers with 20 more employees to switch to paying superannuation obligations for their staff electronically.
Employers with 19 or fewer members of staff have still got until June 30, 2016 before they need to comply with the new SuperStream standard for superannuation payments.
And those with an SMSF — you’re not off the hook!
The new system requires an employer to send contributions electronically in a standard format with linked data and payments.
The Tax Office is warning businesses to take the time to make sure the new system works. If any information is incomplete or incorrect the super payment is likely to be rejected — and may lead to a super guarantee charge effectively for late payment.
Under SuperStream, the contribution data is sent electronically to the fund, and the contribution payment is sent electronically through the banking system. The data message and payment are linked by a payment reference number, which enables reconciliation by the receiving fund.
For small businesses, the Tax Office’s Small Business Superannuation Clearing House is the easiest way to meet these requirements — although some payroll systems have included this feature in their software.
If a business owner is considering updating payroll systems or using the services of a third party to meet requirements, the Tax Office has a certified product register. The register enables employers to identify the readiness of payroll software and other service providers to comply with SuperStream.
Employees will need to provide to their employers their fund’s ABN and tax file number, and also a “unique superannuation identifier”. All this information can be found on their fund statement.
For employees with their own SMSF, slightly different information is needed. As well as an ABN and TFN, the fund’s bank account details and an “electronic service address” are required. The Tax Office advises that if a employee with an SMSF does not provide such information in time, and employer should make an SG payment into their default fund to make sure super obligations are met.
The standard Super Choice form will gather all the information needed.
Some contributions sit outside the regime. Personal contributions and contributions sent to an SMSF from a related-party employer are exempt from SuperStream. These contributions can be made using the current methods.