Superstream Compliance

Superstream, Superannuation and Your Obligations as An Employer

The ATO have announced that major changes are about to take effect for small businesses (fewer than 19 employees) from 1st July 2015, with integration to be complete by 30th June 2016 (provided you do your best to implement after this date and have a firm plan to do so no later than 30 June 2016you are . However for large businesses changes were take effect 1st July 2014.

In a nutshell what do I need to do?

 

Your business needs to be able to report your superannuation contributions and payments to the ATO electronically via the internet and payments will then be made into one account and distributed by the ATO.  Are you able to comply with this legalistive requirement?  If the answer is no, then you need to engage a service.

How much will it cost for JSM Bookkeeping Services to register, report and comply with the superstream requirements for my business?

 

Let’s break it down:

-          Initial set up fee $165 including GST for registering with the ATO.  Includes initial consultation with business owner and set up with ATO, as well as liaison with ATO/Client if required

-          Quarterly reporting $110 including GST

Why not package it in with payroll services?  Have you been considering payroll services before but not sure if it’s the right time for your business?  There’s no time better then now to package all of your services together to save you both time and money.  What could you be doing for your business instead pf processing your payroll and superannuation obligations?

Our payroll fees are cost effective, simple and transparent:

  • 1-20 Employees - $11.00 inc GST per employee per pay period
  • 21-50 Employees - $9.90 inc GST per employee per pay period
  • 51-100 Employees - $8.80 inc GST per employee per pay period
  • 100 + Employees - Call us for a quote
  • Payment Summary Preparation - $12.50 inc GST per employee
  • Initial Setup if converting from software or set up for new employers - $16.50 per employee (once off fee)

 

Suggested Checklist for Employers:  Direct from ATO Website

 

·         Employer checklist

Step*

Action

Suggested timing**

Step 1

Assess options

120 days before target start date.

Step 2

Set target start date

100 days before target start date.

Step 3

Collect new information

95 days before target start date.

Step 4

Update payroll records

90 days before target start date.

Step 5

Upgrade your payroll system

90 days before target start date.

Step 6

Connect to provider

35 days before target start date.

Step 7

Undertake trial

30 days before target start date.

Step 8

First SuperStream contribution

Target start date (day 1)

Step 9

Refine process

15 or more days after target start date

 

Some Frequently Asked Questions – direct from the ato.gov.au website

https://www.ato.gov.au/Super/SuperStream/In-detail/Contributions/Employer-FAQs-Getting-ready-for-SuperStream/

  • How will SuperStream benefit employers?

These changes have a range of potential benefits for employers, including:

  1. othe opportunity to use a single channel when dealing with super funds, regardless of how many funds your employees contribute to
  2. oless time spent dealing with employee data issues and fund queries
  3. ogreater automation and reduced cost of processing contributions and payments
  4. omore timely flow of information and money in meeting your superannuation obligations

Who does SuperStream apply to?

SuperStream is mandatory for all employers making super contributions, APRA-regulated super funds and self-managed superannuation funds (SMSFs) receiving contributions.

Why is SuperStream being introduced?

The main purpose of SuperStream is to ensure employer contributions are paid in a consistent, timely and efficient manner to a member’s account. The change also removes many of the complexities employers currently face as a result of funds being able to set up different arrangements for accepting contributions (due to the lack of common standard).

When do I have to start using SuperStream?

If you have 20 or more employees (medium to large employer) SuperStream starts from 1 July 2014. From that date, employers will start implementing SuperStream and you have until 30 June 2015 to meet the SuperStream requirements when sending superannuation contributions on behalf of your employees1.

We are facilitating the implementation of SuperStream for employer contributions by coordinating the introduction of compliant SuperStream solutions. You will need to work with your service provider to decide when best suits to make the change.

If you have 19 or fewer employees (small employer) SuperStream starts from 1 July 2015. You have until 30 June 2016 to meet the SuperStream requirements when sending superannuation contributions on behalf of your employees.2 Note that you can voluntarily adopt the SuperStream from 1 July 2014 if you are ready and many solution providers may offer to assist you to do this from this date onwards.

What are my options for meeting SuperStream?

Every business is different, so there’s no ‘one size fits all’ approach to adopting SuperStream.

Employers have options for meeting SuperStream – either using software that conforms to SuperStream; or using a service provider who can meet SuperStream on your behalf. We recommend that you start investigating your options now.

Your options may include:

  1. oupgrading your payroll software
  2. ousing an outsourced payroll function or other service provider
  3. ousing a commercial clearing house or the free Small Business Superannuation Clearing House (19 or fewer employees).

Your default fund may also have its own electronic channel that can be used during the transitional period up to 30 June 2016. This fund can provide you with details about how to comply with the SuperStream using their preferred facilities.

Do I need to collect additional information to make contributions using SuperStream?

Yes. To support contributions being made using the SuperStream standard employers will need to collect some new data that will be included in their payroll file to facilitate electronic processing.

Employers will need to collect the following information:

  1. ounique superannuation identifier (USI) for APRA-regulated funds
  2. oABN for SMSF funds
  3. obank account details
  4. oelectronic service address.

For existing employees, simple processes will be implemented to enable employers to obtain this information. This may include receiving information:

  1. odirect from your default fund
  2. othrough the Fund Validation Service
  3. ovia employees who have elected a choice fund (such as a self-managed super fund)
  4. othrough a clearing house.

For new employees, the choice of super fund form will be updated to include this information.

Your HR or payroll provider will provide you with options to support the capture of this information whether this is updating your existing payroll file or storing this information until an update is made available.

To support your readiness for SuperStream you should contact your HR/payroll solution provider to understand their plans.

Collecting information about SMSFs

Employers who have employees with a self-managed super fund will need to obtain the SMSF’s details (electronic service address alias and bank details) directly from those employees.

SMSF trustees have been advised to provide employers (with 20 or more employees) with the required information in a timely manner to support employer readiness.

To simplify how this information is provided to employers, no format has been prescribed. You are encouraged to support various channels, including email.

My clearing house shields me from a lot of this complexity, so why do I have to change?

Provided your clearing house submits data and payments electronically on your behalf in accordance with SuperStream, you will not have to make any change to how you provide information or payments to them.

In some cases however, you will need to provide additional data in the payroll file you send to your clearing house. This may include the fund’s unique superannuation identifier, bank account details, electronic service address or employee tax file number (TFN) details (where these have been quoted).

These additions are designed to correct data quality issues in the current system which often lead to lost superannuation accounts, returned contributions and delayed processing.

Your clearing house or other service providers will be able to advise you about their plans and what they mean for you.

What happens if I am not ready to use SuperStream by the required implementation dates?

The Australian Taxation Office (ATO) will provide flexibility and support to employers making a genuine attempt to comply with their obligations under SuperStream. This will be based on your efforts to get ready, your capabilities, whether you have considered other options for meeting your obligations, and the particular arrangements you have worked out with your default fund.

More information can be found in SuperStream compliance statement.

Example 1: your business is a medium employer and has made plans and taken steps to implement SuperStream in May 2015. Due to a software programming issue with your payroll supplier, the implementation is delayed until September 2015 but you continued to meet your superannuation obligations using existing contributions methods.

As you have been making genuine attempts to meet your obligations, the ATO will take this into account when considering whether a penalty should be applied and will provide support and assistance if required.

Example 2: your business is a large employer and is currently going through a major platform upgrade to your HR and payroll systems. You do not expect to be able to run SuperStream compliant transaction in your system until January 2016 which is after the transition-in period which ends on 30 June 2015. To meet your SuperStream obligations during this interim period you should consider either:

  1. oengaging with an external service provider, such as a clearing house, who can provide a complying solution in this period
  2. otaking advantage of electronic processing alternatives offered by your default fund (it may be one of several) – which may include on-forwarding arrangements covering all your employee’s funds.

If you do not enter into a transitional arrangement based on requirements outlined in Schedule 1 to the Standard or take reasonable steps to meet your SuperStream obligations, you may be subject to ATO compliance action including penalties. These will be applied on a case by case basis, according to the facts and in a manner consistent with the SuperStream compliance statement.

Example 3: You have more than 19 employees and it is now after 30 June 2015. You have not made any plans or taken any concrete steps towards meeting your SuperStream obligation. Despite receiving advice from your payroll provider and the ATO on these obligations, you have chosen to keep making paying contributions using mail and cheques.

You are likely to face ATO compliance action including penalties. These will be applied on a case by case basis, according to the facts and in a manner consistent with the SuperStream compliance statement.

End of example

My employees are mainly seasonal – am I a small or medium employer?

For the purposes of SuperStream, all employees at the start date of 1 July 2014 are counted in determining the size of your business.

Example: your business consists largely of seasonal employees – a mix of 5 full-time employees and 17 casual workers.

You will therefore have a total of 22 employees at the start date and will be classed as a medium to large employer. Your SuperStream obligations start from 1 July 2014 and you have until 30 June 2015 to meet all the requirements.

If your actual payroll numbers fall below 20 employees at 1 July 2014, you will be classed as a small employer. Your SuperStream obligations start from 1July 2015 and you have until 30 June 2016 to meet all the requirements. This threshold really only affects your start date of your obligations under SuperStream. By 1 July 2015, all employers – no matter what size – should be working towards full compliance with their SuperStream obligations.