Change to Super Guarantee Contributions into SMSFs
If your small business uses the Superannuation Clearing House (SBSCH) for employees with Self-Managed Superannuation Funds (SMSF), an important update from the ATO may affect your super guarantee contributions.
Here’s a summary on the update:
Effective 15 March 2024, SMSFs are required to register their bank account with the Australian Taxation Office (ATO). If the SMSF has multiple bank accounts, they must choose one of them to register with the ATO and this registered bank account is where employers must deposit superannuation contributions for the fund’s members.
After receiving the contribution, the clearing house will verify it against the ATO records for the SMSFs before transferring the amounts to the SMSF’s account for the respective member(s).
This measure aims to guarantee accurate allocation and safeguard the security of contributions.
How this update could be impacting your business
The updated validation process ensures that the employee’s SMSF bank account details match their SMSF records. Any mismatch or absence of registered bank account details will trigger an invalid error, preventing the clearing house from accepting payments for an employee’s superannuation guarantee contribution.
If an employee’s super fund details are valid, you can still submit a payment through the SBSCH. However, if an employee’s super fund bank details are invalid, you must remove the payment amounts entered and ensure the total payment matches the new ‘Total to Pay’ amount.
If an invalid error status occurs, don’t panic, after verifying and updating employee information the payment can be processed again.
If you or an employee requires an advisor for SMSF taxation purposes, our team at Simmons Livingstone can help confirm the account registered and ensure prompt updates, please get in contact with our office today on 07 5561 8800.
Your Next Steps
To mitigate any potential implications to your business, we recommend taking the following actions before June 30 2024:
- Verify your employees SMSF bank account details
- Advise your employees to reach out to their SMSF tax advisor and verify that their bank account details are registered with the ATO
- If an employee has multiple bank accounts, ensure they nominate one account for contributions
- Update other relevant employee information and encourage employees to update their details with the ATO
Why it is important to take proactive measures
SMSFs can only recognise a contribution once it’s received, therefore even if the employer makes a payment, if it hasn’t cleared into the SMSF bank account before the end of the financial year on 30 June, it cannot be counted towards the member’s 2024 contribution caps.
For more information about the changes to super guarantee contributions into SMSFs, please contact Simmons Livingstone on 1800 618 800 or via email at admin@simmonslivingstone.com.au.
