If you run a small business with 19 employees or fewer, you have until 30 June this year to become SuperStream compliant. But there’s some legwork for you to do, so you should start sooner rather than later.
What is it?
What’s SuperStream you might ask? It’s the new electronic data standard that applies to contributions to superannuation and payments between funds. SuperStream is 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.
Under SuperStream, you’ll make 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 as long as you’ve collected the necessary information.
Large employers (those with 20 or more employees) are already using SuperStream (or should be).
Small employers (defined as those with 19 or fewer employees) were given extra time to comply with SuperStream — until 30 June 2016 — but we recommend acting now. Doing so will allow you to benefit from the time savings immediately, avoid a last minute rush and make sure all the wrinkles are ironed out before the deadline comes around.
How do I comply?
While the ATO has taken a reasonable stance to date with large employers who missed last year’s deadline (including extending the original 30 June 2015 deadline to 31 October 2015), it is now starting to take compliance action against large employers still paying super using old methods.
Small employers have had an extra year to get ready for SuperStream so there’s no guarantee the ATO will provide any further extensions. There are no general exemptions from SuperStream and, while the ATO has said it will consider hardship cases (for instance, lack of internet access), it is unlikely to let those who simply haven’t got around to updating their systems off the hook.
What happens if I don’t comply?
If you haven’t complied with the law, the ATO has the power to issue a direction notice requiring you to do so. Where the requirements aren’t met within 21 days, it can fine your business $1,800, or 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 the ATO may decide to look into other aspects of your business.
Benefits of implementation
There’s really no reason to put off implementing SuperStream since there are immediate benefits once you’ve done the work. The ATO has estimated that the new system cuts down on administration time by around 70 percent, or 1.5 hours, each cycle (although your time savings will depend on your exact circumstances).
You’re probably very busy and this is another task to add to the list, but it’s one that reaps immediate dividends and avoids headaches down the track. The next quarterly due date is 28 April, so if you have a business with 19 employees or less, act now and save time on your next batch of payments.