Reduce 2015 Tax by Paying Super before 30 June 2015
Although the June 2015 quarter superannuation obligations are not legally due until 28 July, if cash flow permits, business owners should look at paying employee super before 30 June (next Tuesday) in order to receive a tax deduction in the 2015 income year.
Note that the super payments must be cleared from your bank account.
You (or your bookkeeper or internal accountant) should also check your superannuation payable (liability) account in your balance sheet to ensure that all accrued super has been cleared to zero.
SuperStream is the new data standard requirement for all Superannuation funds, including SMSFs. It requires employer contributions to be paid electronically to the superfund. It also applies to rollovers between funds (but not rollovers to SMSFs).
What is the purpose of SuperStream?
“The SuperStream standard is part of the government’s Super Reform package. It will provide a consistent, reliable electronic method of transacting linked data and payments for superannuation. The goal is to improve the efficiency of the superannuation system, to improve the timeliness of processing of rollovers and contributions, and reduce the number of lost accounts and unclaimed monies.” (ATO website)
To meet these requirements, employees will need to provide certain details to their employers (many of which the employer should already have). These details include:
- Name of member of the fund (employee)
- The fund ABN
- The funds bank account details (BSB and account number)
- The funds electronic service address
The electronic service address is then used to send (data) messages in relation to the employer super contributions that have been made.
The above details need to be provided to the employer before 1 July 2015 (see dates below) otherwise the Employer may send the contributions to the Employers standard default fund instead.
The ATO believes that most SMSFs will use the services of a SMSF messaging / service provider rather than try and manage this internally. The SMSF trustees will need to give the provider the following:
- The name of the SMSF
- The ABN of the SMSF
- Contact details of the SMSF
There are many SuperStream providers in the market place and the most appropriate starting point would be the administration service provider for the fund or in many cases, the software provider of your Accounting (SMSF) software.
If the SMSF does not have access to an electronic service address through an existing service provider (software, administrator etc.,), then the fund will need to register with an SMSF messaging provider.
A list of SuperStream providers is also available on the ATO’s website. Click here to access.
The SMSF messaging provider will give the SMSF an electronic service address, will receive the employer contributions message sent by the employer (or payroll provider) and then send the message to the fund in a readable format.
The result of SuperStream is:
- The super contribution is made electronically through the usual banking system; and
- The contribution data is sent electronically in a message format to the fund
- The data message and the payment are linked by a reference number which allows reconciliation by the fund
A lot of confusion has (and still) exists around the implementation date for these requirements.
The following information has been taken from the ATO website:
Medium to large employers
“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 employees.”
“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.
Note that you can voluntarily adopt 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.”
We suggest that you also review the ATO compliance statement regarding SuperStream on the ATO website.
The SuperStream measures do not apply to contributions sent to a SMSF from a related-party employer. Existing processes that are used to make contributions to these funds can continue.
The measure will also not apply where:
- the SMSF does not receive employer contributions
- the SMSF only receives personal super contributions made by the members
For more information, click on this link:
Superannuation Clearing House
The Small Business Superannuation Clearing House is a free, optional service for employers with 19 or fewer employees.
You can make your super guarantee (SG) contributions as a single electronic payment to the clearing house, which then distributes the payments to employees’ funds.
The clearing house is designed to reduce red tape and compliance costs for small business.
If you register to use this service:
- Your super guarantee contributions are counted as being paid on the date the clearing house accepts them (so long as the fund does not reject the payments).
- You have 21 days to pass an employee’s choice of fund on to the clearing house.
For more information on the ATO Super Clearing House, click on this link:
Please contact our office if you have any queries.