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ATO warns small businesses of SuperStream deadline

The Australian Tax Office has warned small businesses that time is running out to start paying superannuation contributions in the new and mandatory electronic standard called SuperStream.

SuperStream is the new mandatory way employers must make super contributions on behalf of their employees. It involves employers sending all super payments and employee information electronically in a standard format.

Those employers that are still paying their super by cheque must move to the electronic solution to make super contributions.

Small business employers have until this Friday – 28 October 2016 – to become compliant. Small businesses who have failed to adopt SuperStream by this deadline are at risk of being non-compliant.

To become SuperStream compliant, businesses must first choose an option that suits their business, such as a payroll system that meets the SuperStream standard, a messaging portal, a super clearing house or their super fund’s online system.

Once an option is selected, businesses may need to collect new information from their employees and update records, and then they will be ready to start using SuperStream.

Posted on 27 October '16 by , under Tax.

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Superfund categories and what they mean

There are four different categories of super funds. These have different primary features and are more applicable to certain people than they are to others.

Retail super funds

Anyone can join retail funds. They are mostly run by banks and investment companies:

  • Allow for a wide range of investment options.
  • Financial advisors may recommend this type of fund as they receive commissions or might get paid fees for them.
  • Although they usually range from medium to high cost, there may be low-cost alternatives.
  • The companies that own these funds will aim to keep some of the profit they yield

Industry super funds

Anyone can join bigger industry funds, but smaller ones may only be open to people in certain industries i.e. health.

  • Most are accumulation funds but some older ones may have defined benefit members
  • Range from low to medium cost
  • Not-for-profit, so all profits are put back into the fund

Public sector super funds

Only available for government employees

  • Employers contribute more than the 9.5% minimum
  • Modest range of investment choices
  • Newer members are usually in an accumulation fund, but many of the long-term members have defined benefits
  • Low fees
  • Profits are put back into the fund

Corporate super funds

Arranged by employers for employees. Large companies may operate corporate funds under the board of trustees. Some corporate funds are operated by retail or industry funds, but availability is restricted to employees

  • If managed by bigger fund, wide range of investment options
  • Older funds have defined benefits, but most are accumulation funds
  • Low to medium costs for large employers, could be high cost for small employers

Self-managed super funds

Private super fund you manage yourself. Many more nuances to this type of fund. Most prominent feature is the autonomy over investment.

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