Every employer in Australia is required to make Superannuation Guarantee payments to their eligible employees. The rules are fairly comprehensive: it doesn’t matter if an employee is full-time, part-time, casual, international, or earning less than $450 a week. If they’re over eighteen, you probably owe them super. However, the process of making those super payments can be a time drain on business owners.
This is where a super clearing house can be invaluable. So, what do small business owners need to know about choosing the right clearing house to stay compliant?
Why use a superannuation clearing house?
The Superannuation Guarantee (SG) requires Australian businesses to contribute to employee super funds by the 28th of the relevant quarter. A super clearing house facilitates these payments.
Through a superannuation clearing house, employers can make a single electronic payment that gets split accurately into each employee’s superannuation fund.
While larger companies usually have administration staff, most small business owners don’t have a regular roster of employees or a payroll officer to handle it all for them. Staff incomes can vary each cycle due to changes in work hours, commissions, salary sacrificing, employment basis, and more.
By using a small business clearing house, you can save time and prevent any payment errors while meeting your compliance obligations.
How does a super clearing house work?
You’ll need to gather employee details, such as their super fund’s unique superannuation identifier, bank account details, electronic service address, and tax file number (TFN).
Once you register employee payment details with a clearing house, it’s a simple matter of logging in each payment cycle and making EFT payments to the clearing house. The clearing house then distributes the payments to super funds based on the information you gave them.
Who runs the super clearing house?
Superannuation clearing houses are usually run by private companies like super funds or clearing houses, financial institutions like banks, or the Australian Taxation Office (more on that later).
As with many other financial services, superannuation clearing houses are regulated by the Australian Prudential Regulation Authority (APRA). APRA is a government body funded wholly by the industries it supervises.
Is using a clearing house compulsory?
The introduction of SuperStream in Australia means that any Australian company with 20 or more employees must make their super fund payments online through a clearing house.
You can use a clearing house so long as it complies with SuperStream legislation and submits data and payments electronically.
Small businesses can access the ATO’s clearing house
The Australian Taxation Office runs a free service, called the Small Business Superannuation Clearing House (SBSCH), for small business owners with 19 or fewer employees. The ATO online service functions like any other clearing house and offers a cost-effective solution for business owners who need to pay multiple funds.
However, there are a few major cons to consider:
- The SBSCH has limited integrations.
- It doesn’t offer a full payroll solution.
- The Australian Taxation Office will close the SBSCH down after 1 July 2026.
If you’re looking for a more comprehensive super clearing house, consider investing in an all-in-one payroll software solution that can keep you compliant with STP, BAS, and more, while making your superannuation contributions via a clearing house.
Many services integrate clearing houses into their software, so compare prices and plans to see what could get you the best value.
This could be especially important to consider with Payday Super on the table. The proposed new legislation would mean you have to make all your super contributions every time your employees get paid, which means at least monthly. That’s a lot more than four times a year!
Not all clearing houses are made equal
Not every clearing house provides the same features. Make sure that any clearing house you employ to meet your super guarantee obligations also meets Australian Taxation Office compliance.
After all, the benefit of using a business superannuation clearing house is that it reduces the time and money you need to invest to meet your ATO obligations as you make your super fund payments.
When choosing a clearing house, look at what it offers and ensure it does the following:
- Pays super funds by the quarterly due dates.
- Meets choice-of-fund obligations.
- Has the licenses that a super fund needs to operate in Australia.
If a fund is SuperStream compliant, it should meet these obligations easily, but the onus is on you to double-check before signing up.
This guide is not professional advice; please speak to your accountant or business advisor for specific financial inquiries.
