SuperStream is the new electronic data standard that applies to contributions to super funds and payments between them. It’s designed to increase the speed and efficiency of processing and allows employers to make super contributions in a single payment, even when it’s to multiple funds.
Once SuperStream compliant, employers make all their super contributions electronically (either EFT or BPAY) and send an associated electronic message containing data that meets the required standards. While this sounds complicated, a number of service providers (including MYOB) have developed packaged SuperStream solutions, so complying isn’t difficult. But there are actions which businesses need to take and deadlines that must be met.
The key deadlines for complying with SuperStream are as follows:
- Large and medium employers (those with 20 or more employees) were required to be SuperStream compliant by 31 October 2015.
- Small employers (those with 19 or fewer employees) are required to be SuperStream compliant by 30 June 2016.
As the deadline for large and medium employers (31 October last year) has passed, the Australian Tax Office (ATO) is now looking to take action against those employers who haven’t complied. That means if you’re a business with 20 employees or more and you haven’t done anything yet, you need to take action as soon as possible.
Becoming SuperStream compliant
What do you need to do to become SuperStream compliant, if you’re not already?
The first step is to speak to your accounting software provider or accountant to check if they have a SuperStream solution, or recommend one. If you use MYOB software, the latest versions are fully equipped with functionality to allow users to comply with SuperStream.
MYOB AccountRight subscribers can sign up for Pay Super – an integrated super payment and SuperStream data service – while other MYOB customers can sign up to the super portal, allowing them to transmit data that complies with the SuperStream standards.
Collecting employee data
Once your SuperStream product is up and running, there’s a range of data you need to collect from your employees (only if you don’t already have it) including their tax file number and their super funds:
- Australian Business Number (ABN)
- Unique Super Identifier (USI) – for APRA-regulated (retail and industry) funds only
- Account number and BSB – for SMSFs
- Electronic service address (ESA) – again, for SMSFs.
In the case of APRA regulated funds, the USI and ABN should be on the employee’s latest statement, or it can be obtained by contacting the fund. Where employees with SMSFs don’t provide you with the information, you may be able to switch them to your default fund instead. However, there is a notification process you must follow first (see the ATO website for more information).
Once you’ve obtained the information you’ll need to update your payroll records, and then you should be ready to start making SuperStream compliant payments.
It’s not a complicated process, but it will take some time to collect all the information required so if your business isn’t SuperStream ready, you need to get started immediately. Choose your SuperStream product and start collecting the necessary information from your employees.
Planning to comply
The ATO has taken a reasonable stance to date with those who, for various reasons, have been unable to comply with SuperStream by the official deadlines (31 October 2015 is a four-month extension of the original 30 June 2015 deadline). However it is unlikely to be as sympathetic to a business that hasn’t complied with SuperStream and has no clear plan for doing so.
If you’re a large employer (200 employees or more) note that you were required to submit a notification form to the ATO if the business couldn’t comply with the 31 October 2015 deadline. So we recommend speaking to your accountant if you haven’t already lodged this form.
APRA regulated funds are required to report on employers still making super contributions using out-of-date methods, so if you’re not SuperStream compliant you should expect to hear from the ATO. The ATO has the power to issue a direction notice requiring you to comply with the law, and, if the requirements aren’t met within 21 days, it can fine your business $1,800. In cases of persistent disregard it can also take prosecution action.
A direction notice (and even an $1,800 fine) may not sound like a huge penalty, but you really don’t want the ATO knocking on your door. You’re likely to incur extra accounting fees, and it may decide to look into other aspects of your business now you’ve piqued its interest.
Many of us are time poor and it can be difficult to find the time to make these types of changes. But one of the benefits of SuperStream is that it’s likely to save you time going forward, so the time investment you make now is paid back in the coming months. It’s another good reason why if you employ 20 or more people and you aren’t SuperStream compliant, you absolutely must get cracking.
Richard Livingston is a founder of Eviser (www.eviser.com.au). This article contains general investment advice only (under AFSL 469838).