By Debra Anderson | Accountant, tax agent and MYOB cloud specialist
Superannuation is a 9.5 percent retirement savings levy paid by employers to employees on top of their gross salary and wages. What exactly is included in the ‘gross salary and wages’ figure can be a bit tricky, especially if you are operating in industries such as construction or retail, where overtime and allowances are everyday occurrences. If you aren’t sure what is and isn’t included, here is a fabulous tool from the Australian Government’s Fair Work Ombudsman to help you work it out.
For many years, paying our employees’ superannuation was a complete nightmare. We spent several hours paying several different super funds with different logins and navigating different web forms only to come out the other side with less money in the bank and hours of our lives we will never get back. Not much fun and – quite frankly – a painful exercise all round.
Then, the Australian Government introduced SuperStream. At a high level, SuperStream is a Federal Government initiative to streamline superannuation reporting and payments. Essentially, it means you must pay your employees’ superannuation electronically using a SuperStream-compliant software package or a superannuation clearing house.
It sounds complicated, but in actual fact it’s the complete opposite. If you are one of the many already using the Government’s Small Business Superannuation Clearing House or, better still, directly from your accounting software such as MYOB, you’ll be very happy to know you are already compliant. For those still paying and reporting to several funds, the Government has legislated that you must do it more efficiently , forcing you to discover the magical world of automation.
So how do you get SuperStream compliant?
My advice is to look at the software you are already using for payroll, as many of them have already included this functionality.
If you are not using software, or your software doesn’t have that functionality, look at the Government’s free Small Business Superannuation Clearing House. Most of the larger superannuation funds offer this service too – they aren’t fully integrated into your payroll system, but they will ensure you meet legislative requirements and will simplify your processes.
Regardless of which way you choose to pay your employees’ superannuation, one thing many employers get wrong is that they don’t pay the contributions on time.
Superannuation payments must be received by the superannuation fund no later than the 28th day after the end of a quarter e.g. July-September quarter contributions are due on 28 October.
Time and time again I see businesses making payments on the 28th of the month, which is simply too late. Check with your provider, but many of them require up to 10 days to distribute and report to the various superannuation funds.
With the advent of SuperStream, your accounting software does all the hard work for you. There is no reason why you can’t make compliance and cash flow a little easier by paying superannuation at the same time as doing wages – weekly, fortnightly, or monthly.
These days I pay superannuation every time I do a pay run. In under 30 seconds and with only a few clicks I can set up the payment, have it come out of my bank account, remit the information to the superannuation fund, and record all the necessary transactions in my accounting software. It’s simple, easy and I’m 100 percent compliant every time.
For more business building tips, visit myob.com.au/businesstips.