Employers in Australia are required to make superannuation payments to every employee. With the introduction of the SuperStream legislation in 2012, every employer has to send information about super contributions in an electronic format that meets specific SuperStream requirements.
But what exactly is SuperStream? How can you ensure compliance with SuperStream? You will know the answers to these questions here in this article.
What Is SuperStream?
SuperStream is a framework established by the Australian government that determines the format for making super contributions. The contributions and the associated information are sent electronically to the Australian Taxation Office (ATO) and the superannuation fund companies.
Under SuperStream, each payment that is made has a unique reference number. This allows employers to make a contribution in a single batch. This is irrespective of the fact that employees are registered with different funds.
The standard format also allows super contributions to be processed much more quickly, efficiently, and without errors by ATO and the super fund companies.
SuperStream also makes it easier to identify employees and associated funds. The advantage of this is that employees’ lost or unclaimed contributions can be easily tracked down.
Why Was SuperStream Introduced?
The reason for introducing the SuperStream standard was to reduce the time required to verify super fund contributions. In addition, the standard can help in correcting data for employers in Australia.
Introducing the SuperStream standard has made the entire process of making super funds payment more efficient. The standard has introduced a lot of innovative reforms such as:
- Electronic payment made mandatory
- Use of Tax File Numbers (TFNs) and Unique Superannuation Identifiers (USIs)
- Uniform standards that help reduce lost accounts
- Efficient verification of default fund employees using SuperTICK
- Gateways regulated by ATO to ease the process of payment transfer between employers and super funds.
Employers in Australia need to make sure that the payment solution is compliant with SuperStream. This is important to ensure that payments are made in a consistent and efficient manner. The requirement is compulsory for all employers in the country that make super funds contributions.
How Can Your Business Become SuperStream Compliant?
Businesses need to ensure that the payroll services Australia are compliant with the SuperStream standard. The payroll system used for recording payments should be consistent with the standard.
Setting up your company to become compliant with SuperStream is a one-time process. Your accountant will help you in ensuring compliance with the standard.
Are There Exceptions for SuperStream Compliance?
Most employers that make super funds payments are required to ensure compliance with SuperStream. However, there are certain exceptions that you should know.
SuperStream compliance is not required if you are a sole trader or self-employed and don’t make contributions to anyone except yourself. Compliance is required only if you make super contributions for employees.
Another exception is for an employee or director of an incorporated business, and the business makes a contribution to you self-managed superfund (SMSF). Buy any contributions to SMSF to anyone else needs to be compliant with the SuperStream standards.