Superannuation – watch your step
The superannuation system is now over 20 years, and its underlying infrastructure is showing its age.
However the super industry is now on the cusp of a major modernisation program – an hospitality employers will need to comply with the reforms.
The Australian Taxation Office (ATO) has written to approximately 100,000 employers around Australia to help explain their obligations under a new approach to making superannuation contributions.
From 1 July 2014, businesses with 20 or more employees will start using the Data and Payment Standard (the standard) for making contributions. For businesses with 19 or fewer employees, the standard will apply from 1 July 2015.
The new data and payment standard will herald a new era of efficiency and standardisation for a sector that is, in some cases, still demanding payments by cheque. Employers are going to be central to this transition, as they will need to make employee super contributions in line with the new electronic payment standards. This week the ATO is writing to 100,000 medium-to-large employers (20 or more employees) to explain that by July next year, they need to have systems in place for the change. In many cases, this will be as simple as upgrading their payroll software. (Smaller employers with 19 or less employees have another year to get ready).
Employers in the hospitality industry with 20 or more employees will need to do the following to comply with the data standard by 1 July 2014:
• Start preparing now: Employers should speak to their default fund or service provider
• Find the best approach for their business in order to adopt the standard: This could involve upgrading payroll software, engaging a tax agent or bookkeeper or using a clearing house
The ATO explains that there will be a range of solutions available to help implement these changes.
There is no one-size-fits-all approach to adopting the standard. Employers can choose the one that best fits their business, such as upgrading payroll software, engaging a tax agent or bookkeeper, or using a clearing house. Super funds will also have a range of ways they can help employers make the change.
The ATO is working with funds and service providers to develop a transition-in plan which provides flexibility for employers on their start-up date. More details on this will be made available on the ATO’s website soon.
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