Tolerable Tax - A pinch of FBT to get you

I am Brett Beaver, a Perth based “business services” tax tragic, welcome to Tolerable Tax! On Tolerable Tax this week, let’s review the SuperStream, requirements for employers.

Happy New Year! That’s right, for us accountants it’s a time of celebration (between 8.25am – 8.30am; with little to no alcohol intake and no drunkard smooching!) as we begin the new financial year! However, it’s also a time to reflect to ensure that we are keeping up with new compliance standards.

One of these compliance standards, that was introduced and applied from 1 July 2014 last year for medium to large employers (with 20 or more employees), is the superannuation payment standards “SuperStream”. As a reminder, these rules are aimed at improving the efficiency of the superannuation system by ensuring employers make superannuation contribution for their employees electronically.

Why am I bringing this up now… if it was applicable 1 July 2014… well, for small employers (with 19 or less employees), the SuperStream standard applies from 1 July 2015 with full compliance required by 30 June 2016. Given the standards apply from 1 July 2015, with there being some urgency to comply (if you have not already!), I have summarised below the key actions you should attend to as soon as possible:

1. Prior to making your first superannuation guarantee contribution payments (Note – I recommend that this is done prior to payment of any outstanding superannuation from the June 2015 quarter in July, or by the due date of payment being 28 July 2015 at the latest), you may need to collect additional information from your employees about the Funds they would like their superannuation paid to. For example you may need the following:

• Unique superannuation identifier (USI) for normal commercial super funds
• ABN for all funds
• Bank account details for SMSFs
• Electronic service address for SMSFs
• Employee TFN for all funds

2. Ensure your accounting software and processes are able to handle the new requirements. If not, you may need to look at some of the following options:

• Upgrading your existing payroll software
• Using an outsourced payroll function of a service provider
• Using a commercial clearing house or,
• Using the free Small Business Superannuation Clearing House (SBSH) – available only for small employers (19 or less employees)

3. The next step is to actually make your first SuperStream contributions ensuring that you have contingency plans to fall back on should any issues arise. This will also ensure your superannuation obligations continue to be met in spite of any teething errors with your new process.
Once everything is up and running, you should continue to refine your processes over the next year to ensure the smooth automation of your payments going forward.

Full compliance with this standard will become mandatory (by 1 July 2016 for small employers). Therefore, it would be best practice to begin your preparations and commence payments via SuperStream as early as possible.

There is an ‘employer checklist’ available on the ATO’s website which can provide you with further information:—A-step-by-step-guide-to-preparing-for-SuperStream/?page=2

So where to from here:

Review your payroll system to ensure that you are complying with the SuperStream standards;

While you are reviewing your software or choice of Clearing House, liaise with your employees to collect all their necessary superannuation information to ensure you have this “ready to go” and there is no further delay in the set up process;

Give yourself enough time to establish this process before having to make your first Superannuation Guarantee payment. Remember that you need to make your superannuation contributions 28 days following the end of each quarter – and these may take time to clear through the Clearing House;

If you need assistance with setting up your SuperStream, you can always contact your tax advisors.

Let me know in the comments if you would like a particular topic discussed in a future instalment of TT and I will do my best to accommodate! Remember, I am unable to give advice, but am always happy to share my thoughts on an area of tax. For specific advice, talk to your advisors or contact me.

And please remember, Tolerable Tax does not contain specific advice. Each taxpayer’s circumstances differ and you should always seek advice (specific to you) before taking any action.

Tolerable Tax will be back with an exciting new post soon. So until then, may your tax be tolerable!