All Australian employers must provide their employees with a Superannuation Guarantee, compulsory superannuation payments that the employer makes on behalf of its employees. Whether an employer is a small business or a large corporation, they must contribute 9.5% of the employee’s ordinary working time as part of superannuation. This rate has been in place since 1 July 2014 and is set to increase to 10% from the year 2021.
For smaller businesses however, coordinating the superannuation payments for all their employees can be a logistical nightmare in a business environment without advanced payroll automation and processing systems. The Superannuation Clearing House was established to help these businesses streamline the Super Guarantee payments for their employees while minimizing the super compliance costs.
Businesses with less than 19 staff or with less an annual turnover $10 million can make use of the free services that are provided by the Small Business Superannuation Clearing House (SBSCH) to help them meet their SG obligations more efficiently and affordably.
The Superannuation Clearing House is a 100% free service. However, you may incur some small costs if you are making super payments via Electronic Funds Transfer (EFT) or via BPay in which case your financial institution may charge a small fee.
How Does the Superannuation Clearing House Work?
The Small Business Superannuation Clearing House service is provided by the government. The main purpose of the SBSCH is cut down on the red tape as well as cost overheads that small businesses grapple with when trying to comply with the compulsory superannuation payments requirement.
The SBSCH is designed to streamline and simplify the process that small businesses go through when making the superannuation contributions on behalf of their employees. The employers are able to make a single lump payment into the SBSCH and which is subsequently distributed into the individual employees’ superannuation fund accounts.
The alternative, outside the Superannuation Clearing House is for the employer to make individual super payments to each of the employees’ superannuation funds at least four times every year. Invariably, this is a fairly time consuming and costly process that might also be fraught with errors and vulnerable to internal fraud. The small business will have to incur certain compliance costs that eat into its margins.
Using the SBSCH, you are able to radically simplify the process and eliminate lots of repetitive steps while cutting down on the cost of compliance. All the small business owners need to do with a superannuation clearing house is to add the employee details once into the system. These details are stored securely in the SBSCH system for all future transactions. The Super Guarantee (SG) obligations of the employer are fulfilled as soon as they have been accepted into the Clearing House.
For the past few years, the Clearing House was an exclusive online service. However, the service has now been integrated into the Australian Taxation Office’s online service. The service offers business owners plenty of functionalities including the ability to sort the employee listings and accept credit card payments.
Accessing the SBSCH
Business owners wanting to access the small business clearing house have to log into the business portal of the ATO website https://bp.ato.gov.au/. To access the Business Portal, you must have the Auskey for your business.
For more information about the Small Business Superannuation Clearing House, check out the ATO website at https://www.ato.gov.au/business/super-for-employers/paying-super-contributions/small-business-superannuation-clearing-house/.