Tips to prepare for new superannuation changes

Whether running a small business or a multi-national corporation, if you are conducting business in Australia it is compulsory to make superannuation contributions on behalf of your employees.

However, as of July 1, 2013 there will be changes imposed that affect how you make your super contributions.

Starting in July contributions will increase from 9.0% up to 9.25% and the upper age limit, which previously meant contributions didn't have to be made for employees aged 70 and over, has since been lifted to encourage mature workers to stay in the workforce.

So what does all this mean for you? It's important you prepare for the change and ensure you have working procedure in place to smoothly transition with the super reform. Business Victoria recently looked at some tips to help ensure you are adequately prepared when July rolls around which we have summarised below.

  • Check your records and ensure that all superannuation payments made on behalf of employees have been updated to the end of June 2013. This ensures that when July rolls around you will start the financial year ready for all the reforms taking place.
  • Ensure that you are now making contributions for all employees. If your company employs anyone over the age of 70 or under the age of 18 check to see if they will now be eligible for super payments.
  • Make contact with the superannuation funds you make contributions to and confirm that as of January 1, 2014, they will be providing MySuper accounts. MySuper is the new model of super that will replace all existing default super products with the aim to make comparing funds easier for members and employers.
  • Update all your employee records to make sure you are making the correct contributions on their behalf. If you are struggling to determine how much the new payments will be, log on to the ATO superannuation contributions calculator for help. It's also a good idea to check the ATO website to see if your pay slips comply with ATO regulations.
  • Determine how the increase in payments will affect your business. The best way to do this is by preparing a profit and loss statement that will budget the new superannuation payments to determine the impact. Another good measure is to prepare a cash flow forecast that will incorporate the new amount you will owe from superannuation and how often you make contributions. This will help you determine how the new laws will affect the cash you have available.
  • Consult your default fund, accountant or payroll manager to see what's required to comply with the new electronic reporting standards that are being introduced. This is part of the new data standards being introduced by the government that aim to improve the efficiency of the superannuation system by improving the timeliness of processing rollovers and contributions, and reducing the number of lost accounts and unclaimed money.

Remember, the best thing to do is prepare for these changes as soon as possible. The sooner you incorporate them, the better positioned you will be to hit the ground running at the beginning of the financial year.

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