SuperStream is the new way all employers must report and pay their employee’s superannuation contributions. With the SuperStream system superannuation contribution data will be processed electronically and the payments made by EFT or BPAY.

Why do we need Superstream? What’s wrong with the way I process super now?

The ATO claims Superstream is all about automating the superannuation contribution process and making the system easier for both employers and superannuation funds. ‘Making Super Simple’ is their favourite tagline in regard to the system changes.

While I do agree the system will provide small time savings for some employers the reality is the system is actually designed to allow the ATO to more efficiently identify employers who are not meeting their superannuation obligations. By matching the payments made to superfunds with the data transmitted they can tell if particular employers have missed the payment deadline for super and take appropriate action.

I’m certainly not saying that catching super cheats is a bad reason for the overhaul to the system. Employers who do not pay their employees entitles on time and in full should have a spotlight on them. However, we’re all adults, lets be honest with each other!

How do I get myself Superstream ready?

Getting yourself Superstream ready is a 3 stage process. Given the time it may take to complete these steps I’d highly recommend you take action on this right now. You need to be on step 3 by 1 July 2016.

Step 1 – Choose a Superstream option

There are a range of SuperStream solutions allowing you to choose the one that best suits you and your business. These options include:

A payroll system

If you use a payroll system, either a stand-alone software package or the payroll module within bookkeeping packages like Xero, check with your system provider that it is SuperStream ready. If they are not you may wish to look at updating your bookkeeping system. It’s also important to check whether they cover data transmission, payments or both.

A super fund’s online system

Large retail superfunds have their own online payment systems you can use. If all of your employees use the same default fund this may be a good way to go. However, if your employees use different funds this may not be an efficient option to choose.

A super clearing house

A clearing house pays super to your employees’ funds for you. You send a single electronic payment to the clearing house, together with the contribution data for all your employees and the clearing house does the rest. Many retail superfunds offer these options and it may be worth having a chat with your default fund to see if they can facilitate this for you.

If you have 19 or fewer employees, or a turnover of less than $2 million a year, you can use the ATO’s free Small Business Super Clearing House.

It’s important to remember that even if you outsource parts of the super contribution process you are still responsible for ensuring your employee’s super is paid correctly.

A messaging portal

A messaging portal can convert contribution data for your employees to a SuperStream compliant format and send it to the relevant funds for you. You still need to make one electronic payment. Speak to your financial institution if you wish to explore this option.

Step 2 – Collect Information from employees and update your records

In preparation for Superstream you will need to collect some data about your employees and their superfunds. You may already have some of this information.

What Information do I need?

Ask your employees to provide you with the following information if you do not already have it on file:

– The employee’s tax file number;
– The Superfund’s ABN
– The Superfund’s bank account details;
– The Superfunds Unique Superannuation Identifier (USI).

If your employee has a Self-Managed Superfund (SMSF) they will need to provide you with an ‘Electronic Service Address’ (ESA) rather than the USI provided by the retail superfunds.

Where will my employees find this information?

The easiest way to get this information is to have your employees contact their respective superfunds and ask for the information. While there are some resources available online which will allow you to look up ABN’s and USI’s given the way retail funds are structured it can be almost impossible for someone from outside the fund to work out which ABN and USI are applicable to a particular employee’s superannuation product.

If your employee has an SMSF they may need to contact their accountant to request the ABN and ESA for the fund. If they don’t provide you with this information, you can ask them to complete and return a standard choice form that mandates the provision of this information. If they don’t return this form within 28 days and you are ready to use SuperStream you can pay their super contributions to your default fund.

For new employees all the information required for SuperStream will be provided when an employee completes a Standard Choice Form.

Once you have all of this information, enter it into your chosen SuperStream solution (the options covered earlier).

A Final Word

I believe the most popular Superstream alternatives for small businesses will be electronic payroll systems (like Xero) and the ATO’s free clearing house. If you are a business client of Panic Atax chances are you’re using Xero as your payroll platform. Our article on how to apply Superstream in the Xero environment can be accessed here.

Working with Panic Atax

Panic Atax is an Accounting and Business Advisory firm specialising in building strong relationships with clients and removing the stress many small business owners experience around Financial Reporting, Tax and Cash Flow. If you’re looking for an accountant to build a great, long term working relationship with we’d love to hear from you.