Superstream has been in place for a couple of years now, and for businesses with less than 20 employees, the implementation deadline for SuperStream is fast approaching. Businesses with over 20 employees had to implement SuperStream by 31 October 2015, but by 30 June 2016, all businesses need to be SuperStream complaint.
According to a presentation by the ATO in March 2016, over 500,000 employers (63%) have implemented SuperStream:
+ Over 95,000 large/medium employers (97%)
+ Over 400,000 small employers (58%)
+ Around 120,000 use the ATO small-business clearing house
What is SuperStream?
SuperStream is a format for processing superannuation data and payments electronically via the internet. It is a way for employers to make all their contributions in a single transaction, which can also be split across multiple superannuation funds.
According to research undertaken on behalf of the ATO, time savings for employers can range up to 70% depending on the number of employees a business has.
Can I use my accounting software for SuperStream?
If you are already using accounting software such as MYOB, Xero or QuickBooks, you may already have a SuperStream solution through your payroll package. These platforms are able to comply with SuperStream standards. If you are not and need to upgrade to a payroll package, then additional charges for your subscription may apply.
If you cannot use your existing accounting software, then the ATO has a solution for small business employers. The ATO provides a free Small Business Superannuation Clearing House which can be used by employers with 19 or fewer employees, as well as those businesses with an annual aggregated turnover of less than $2 million.
Are there any exemptions?
All businesses paying superannuation to an employee must take all reasonable steps to be SuperStream compliant by 30 June 2016. The only exemption to this rule is where you are related party employer and your super guarantee contributions go to your own SMSF. Other than this, there are no other exceptions available to this rule.
How will the ATO enforce compliance?
The ATO has a range of enforcement options if the employer does not comply. These include the ATO issuing a direction notice or applying administrative penalties for failure to comply with SuperStream obligations set out within the Superannuation (Industry) Supervision Act.
For example, the ATO may issue a direction notice that requires an employer to obtain a certified SuperStream solution. If the employer does not comply with a direction notice within 21 days, the ATO may impose an administrative penalty of up to ten penalty units, which, based on today’s rates, is up to $1,800.
What if I don’t have internet access?
For those living in rural areas where internet connection is not reliable or don’t have internet connection, the ATO’s suggestion is to use the services of a tax agent or bookkeeper that may be able to use Superstream on your behalf.
How secure is SuperStream?
The ATO provide oversight of the SuperStream gateway network. All transactions processed in this network are encrypted according to the SuperStream standard and best practice principles of security management are applied to gateway operators.
The ATO have a SuperStream certified product register which can be an important resource and excellent starting point for employers to check the status of solutions they are considering to implement SuperStream.
To find out more about SuperStream or learn how you can become SuperStream compliant, please contact your local Accru adviser. We offer superannuation and retirement planning services to help our clients invest tax-effectively in super.
For an employer checklist please see the ATO’s Employer Checklist.
By Jonathan Wong, Accru Melbourne