The ATO clearing house for processing Superannuation for your employees is a simple and effective solution which is super stream compliant for employers with less than 19 employees.
However, employers need to be sure each time they submit a payment – that the employee’s details are set up correctly. If the details are not correct, for instance if the employee has changed funds, the super fund will reject the payment and send it back to the Clearing House.
If the payment is returned the ATO Clearing House will contact you and ask that the correct details be updated within 7 days.
If you update within the 7 days the payment will be resent with the correct details
If you fail to update within the 7 days the payment will be sent back to the employer’s bank account nominated by the employer when the Clearing House was set up.
Of course this can raise compliance issues as to whether the payment of superannuation was paid by the due date for Superannuation Guarantee.
Another common error is when making payments the amount needs to match exactly the total amount that has been submitted on the payment Instruction. If the amount received by the ATO clearing house differs in any way to the amount submitted it will be automatically refunded to the nominated bank account. If the employer doesn’t respond in time and re-submit, the total payment for the quarter could fail.
The best practice is to make sure when you submit the Payment Instruction that the details are correct. Employers who have their BAS or Tax Agents attend to the submission for them should make sure they communicate any changes of funds or details to their agent so that the details can be updated and avoid the problems associated with having the incorrect details.
Care should also be taken in paying the exact amount as per the Payment Instruction submitted
This article appeared in our November 2018 newsletter. Author: Patricia Glenn