As a small business owner, navigating superannuation payments for your employees can be a complex task.
The Australian Government has introduced the Small Business Superannuation Clearing House, a convenient and free online service to help business owners manage their superannuation obligations efficiently. Let’s explore how eligible employers can benefit from this service and simplify their superannuation obligations.
To utilize the Small Business Superannuation Clearing House, you need to meet one of the following criteria:
- Have 19 or fewer employees
- Maintain an annual aggregated turnover of less than $10 million
It’s important to note that you must meet these eligibility criteria each time you use the service. In case your circumstances change and you no longer qualify, you will need to explore alternative options to fulfill your SuperStream requirements.
Understanding the Clearing House
The Small Business Superannuation Clearing House is designed to streamline your superannuation payments. Through this online service, you can make a single payment that covers super contributions for all your employees. The clearing house then distributes the funds to each employee’s respective superannuation fund, as per your instructions.
Benefits and Features
When using the clearing house, you gain access to several benefits and features that simplify the superannuation process for your business:
- Flexibility in payment amounts: You can nominate a regular amount for each employee or make changes to the amount whenever you submit a payment.
- Super guarantee compliance: By ensuring that your payment and instructions are accepted by the clearing house in accordance with their terms and conditions, you fulfill your super guarantee (SG) obligations.
- Convenient online payment: Making payments through the clearing house allows you to meet SuperStream requirements easily, reducing paperwork and administrative burden.
- Access to past contributions: The clearing house keeps a record of your past super contributions, providing easy access to historical data.
Getting Started with the Clearing House
If you’re a first-time user, you’ll need to register for the clearing house by providing essential information about your business, employees, and their choice of fund.
Additionally, you’ll need to specify a default fund where payments will be directed if an employee hasn’t chosen a specific fund. Don’t forget to share the clearing house privacy statement with your employees to ensure transparency.
Accessing the Clearing House
As a business or individual employer with an Australian business number (ABN), you can access the clearing house through Online services for business. You also have the option to authorise someone else, such as a staff member, to use the clearing house on your behalf.
To access Online services for business, you’ll need to sign in using myGovID. If you’re new to online services, you’ll first need to set up your myGovID and link it to your business in RAM (Relationship Authorisation Manager). For more information, see Accessing online services with myGovID and RAM.
For individual employers with an ABN or withholding payer number (WPN), accessing the clearing house is possible through their myGov account linked to ATO online services.
Using the Small Business Superannuation Clearing House enables you to efficiently manage your superannuation obligations, ensuring that your employees’ contributions are made accurately and on time. However, keep in mind that it may take up to 7 business days for payments to reach employees’ super funds.
If any payment errors occur or employee details change, prompt action is necessary to update the information and rectify any issues.
Watch the video for more details about the clearing house on the ATO website.
If you or your clients intend to claim a tax deduction for super payments made before 30 June, it’s crucial to adjust your payment plans accordingly. To ensure eligibility for the deduction, we recommend making the payments before the scheduled outage occurs. Any super payments made after this date may not be eligible for a deduction for the financial year ending on 30 June 2023.
By making the necessary adjustments and paying ahead of the outage, you can safeguard your clients’ employees from potential disadvantages. Payments reaching their super funds after 30 June may impact the employees’ super contributions for the current financial year. To prevent any disruptions, it is advisable to submit the payments in a timely manner.
Contact KMT advisers now if you need assistance with your business tax!
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek tax advice from a qualified accountant at KMT Partners. Information is current at the date of issue and may change.