If you’re still paying your employees’ super with bank transfers (or worse still, cheques), then you need to change the way you do things—and fast.
From 31 October 2015, if you made super contributions for 20 or more employees you had to start making those payments online.
Those of you with fewer than 20 employees have until the extended deadline of 28 October 2016. The original deadline was 30 June 2016.
That means you can no longer pay by cheque (yes, some super funds insisted on being paid that way). Chances are a bank transfer won’t cut it either because you’ll also need to include other details such as the employee’s name, Tax File Number and Super Fund member number.
Help the government help you
Why is the government making you do this? Well, the government is acutely aware that people aren’t putting enough money away for their retirement.
At one point the magic superannuation figure to retire on comfortably was one million dollars. But according to a recent Deloitte report, that figure is now $1.58 million for men and $1.76 million for women. (Women live longer, so they have to save more.)
So as part of their plan to streamline superannuation payments, the government wants 20-to-40-year-old employees to “become more educated and proactive with their super investments” (to quote Richard Puffe).
The bottom line? If you’re not using an electronic accounting system, it’s time to make the switch.
Make things easier for yourself with Xero
Naturally, the accounting systems that will handle the change best are those that already do everything online. Few systems do that better than Xero.
Xero operates completely in the cloud, and already works with feeds from banks and other financial institutions. So it’s easy for Xero to also work with superannuation funds.
How easy? Here’s a video showing how to easily make superannuation contributions for employees using Xero.
This feature is being included in all Xero Premium plans.
Get ready to ride the SuperStream
The deadline for moving to online superannuation contributions has been and gone. If that means you need to move to an electronic accounting system, it’s time to get that process moving.
Talk to us and we can guide you on converting across to Xero. Streamlined payment of your employees’ superannuation contributions will be just one of many benefits you’ll enjoy once you’re using Xero.