Australian firms need to ensure payroll systems are up-to-date and supported by providers ahead of looming SuperStream deadlines.
The start of 2015 has triggered the countdown for employers to implement SuperStream, one of the Australian Tax Office’s most fundamental efficiency reforms affecting all businesses in the country, regardless of size.
By the 1st of July this year, all large and medium-sized companies – those with 20 or more staff members – must have migrated to the new system, while small businesses employing fewer than 20 people have an additional year – until the 1st July 2016 – to become compliant. Once fully implemented, SuperStream will provide a simple and single channel for all companies to make superannuation contributions electronically to all funds, on time.
However, before companies can begin enjoying the benefits of this simple and single channel, they first need to make some substantial changes to current practices. The good news is that many companies have already embarked on their SuperStream compliance journeys. We recently conducted a survey of our 5000-plus customer base, which comprises a substantial portion of the 50-1000 employee segment, and benefits over a million employees via our Sage MicrOpay solutions.
The findings revealed that encouragingly, 65% of the respondents had already started implementing their SuperStream solutions via a chosen software provider. These businesses have started to, or will soon, make all superannuation contributions electronically, including to self-managed funds. This means that by their relevant deadline, they will have become fully electronic in superannuation fund payments and documentation filing, and will no longer submit payments by cheque or related information via paper forms.
The benefits for these businesses will be substantial. Costs will decline and efficiencies increase by improving data flows and eliminating manual handling and unnecessary complexity, especially for those companies that make payments to multiple funds. This is an obvious gain given that 40% of all our clients manage contributions to between 21 and 50 funds, and a further 20% handle more than 50 funds.
Good news indeed for those businesses that have embraced the change. However, our research showed that 35% of our respondents either hadn’t yet made a SuperStream software choice or were unsure if the company had.
The move to an all-electronic platform for superannuation payments will require a major mind shift for some companies, given the latest Australian Bureau of Statistics (2012-2013) research on the use of the internet by business reveals that 7.3% of all companies in Australia don’t use the web at all*, and will need to adopt at least some basic internet use in order to comply with the SuperStream requirements.
In the coming months, those companies that still need get to grips with the SuperStream changes have an important but manageable ‘to-do’ list to complete, and the ATO has a useful guide to take companies through the requirements.
A good starting point for any company is to engage an experienced payroll provider who can ensure full compliance with SuperStream. For those companies that have an existing relationship with a payroll software provider, first up is to schedule a discussion to establish its preparedness for SuperStream. In particular, you should ask your provider whether it has updated its software to ensure all the necessary SuperStream data fields have been included and are now active, and additionally, establish its plans to provide your business with education sessions and support services to help you get up to speed.
Another option to consider is using a superannuation clearing house service, which can help you meet
SuperStream requirements on your behalf and remove the risk of non-compliance. SuperStream-compliant features of superannuation clearing house services include integration with your payroll software, secure payment processing via a single file and single payment, and up-to-date superannuation fund information.
Choosing the right clearing house is important, and you can ensure you make the appropriate choice by asking how it would receive your data, when you could test your data with its system, and whether it offers information sessions and support to assist your business through this change.
With key deadlines looming, it is essential to have a plan for SuperStream compliance before it’s too late. We have seen that some companies have been frustrated in achieving this goal by not putting a project plan in place. If your business is preparing for SuperStream, ensure there’s a nominated key personnel responsible for the implementation, set internal deadlines to start using SuperStream, and go to the experts to overcome all issues smoothly and efficiently.
About the Author:
Michael Smith has extensive experience in the software industry and has run a highly successful professional services team, been the GM of Sage Business Solutions and is currently Managing Director of one of Australia’s leading payroll and HR software companies, Sage MicrOpay, a subsidiary of Sage PLC a FTSE 100 listed multinational.