Choosing a super clearing house
Choosing a super clearing house is an important business decision. Here is a guide to choosing a service that suits your needs.
Before choosing a super clearing house (SCH) it’s worth talking to a few service providers and asking them some important questions. It could save you, and your business, a lot of time and money.
What is a super clearing house?
In simple terms, it's a digital service that distributes super contributions to your employees’ super funds for you. You send a single electronic payment to the SCH, with all your employees’ super contribution data. The SCH takes care of the rest.
Do I need to use a super clearing house?
The short answer is yes. The Australian government passed SuperStream legislation back in 2012, making electronic payment of super compulsory. This was introduced for two main reasons:
- To reduce the number of missing and lost super payments
- To simplify each businesses’ task of managing and reporting on payments
The Australian Government also recently introduced the Single Touch Payroll reforms which requires information about your payroll, including super contributions, to be electronically reported to government agencies. Some SCH solutions allow you to meet both SuperStream and Single Touch Payroll requirements.
What are the benefits of an SCH?
Just imagine the time it would take to make separate payments to each employees’ super fund. Some large companies in Australia deal with 50+ super funds every payment cycle. And if staff incomes vary each cycle (due to shift loadings for example) then the administrative burden can be enormous.
What are my SCH options?
In Australia, there are three options that you may wish to consider:
- For small businesses with less than 20 staff, or less than $10m per year in turnover, you can use the free Small Business Super Clearing House.
- A commercial clearing house of your choice
- Your super fund’s clearing house, e.g. QuickSuper
What should I ask before choosing an SCH?
Here are five key questions to ask. Remember, don’t sign up for anything until you have compared a couple of options.
- Is the solution compliant?
This should be your very first question. In other words, the SCH must meet the Australian Government’s requirements including SuperStream and Single Touch Payroll. If they don’t, walk away.
- What are the costs?
If you’re using payroll software that offers a similar service to an SCH, check for any additional fees. Also, ask if they charge per employee, or per transaction; then estimate your annual cost. Finally, consider whether a no-cost option will fulfil your needs, e.g. QuickSuper.
- How long does it take to process payments?
An important factor to consider is the time it takes for your payment to be processed by the SCH and deposited at the super fund/s. If you choose an SCH that is fast and efficient, you’ll minimise the number of enquiries from your employees.
- How can my accountant access the service?
Check if the SCH allows multiple businesses to use one SCH login. This will be useful for bookkeepers or accountants who manage the payment of contributions for multiple businesses. It will also simplify and lessen the workload on your payroll team/person.
- Do they automatically validate employee information?
When considering an SCH, ask them if they use the Australia Post database to automatically validate employee addresses. This will minimise the chance of errors and speed up processing times.
QuickSuper is our streamlined clearing house that allows you to submit your staff’s superannuation data and payments electronically. As well as being a time-saver, QuickSuper is convenient, secure, SuperStream compliant and, best of all, easy to use.
To learn more and register as an employer, visit our How to make payments page.
QuickSuper is issued by Westpac Banking Corporation (ABN 33 007 457 141, AFSL 233714). An offer to issue this product may be made to you by Westpac, subject to completion of the application process. The Product Disclosure Statement (PDS) for QuickSuper is available on the Westpac website. You should consider the PDS before deciding to accept any offer made by Westpac to issue the product.