Ph: (03) 9794 8180 | Email: services@mjcpartners.com.au

MJC Client Form

Ph: (03) 9794 8180
services@mjcpartners.com.au

MJC Client Form

SMSF Times

In this edition of the SMSF Times we are delving into:

‘Payday Super’ and its implications on your SMSF

The legislation has just passed and will take effect from 01 July 2026… so we’ve got about 6 months to prepare for it. At its simplest, it requires employers to pay super to super funds at the same time as they pay their employees’ wages (rather than quarterly which is the current rule).

Whilst this will put some cash flow constraints on businesses, we generally approve of this measure. Employees will get their money into their super fund earlier so it can start earning investment returns quicker and it should reduce the risk of unpaid super.

On the face of it, payday super compliance has nothing to do with your SMSF – all the obligations have to be met by your employer. However, you need to make sure your fund can accept the contributions!

If there are any issues with the contribution the ATO don’t care who’s fault it is – they penalise the employer. What this means is that the Employer will be quickly following the steps they need to take:

First Preference: Pay to Your Nominated Fund

  1. If you’ve provided valid SMSF details (ABN, ESA, bank account) and the fund is “Complying” on Super Fund Lookup, the employer must pay contributions there.

If They Can’t Pay to Your SMSF (e.g., status removed or details invalid):

  1. The employer must pay into your stapled fund (the ATO-linked default fund for you).
  2. This is mandatory under the stapled fund rules introduced in November 2021.

If You Don’t Have a Stapled Fund:

  1. The employer must pay into their default fund, which will involve creating a new member account for you in that fund.

That would be extremely gross. You would then have two super fund member accounts… multiple administration fees etc.  You really don’t want this to happen. So, this is how make sure it doesn’t happen:

MAKE SURE YOUR ESA IS WORKING!

When employers make contributions to your fund, they need to send a little digital file along with the contribution that tells the super fund who the contribution if for, what type of contribution it is etc. They send this digital file through a system called Superstream… and to accept the digital file, your fund needs an Electronic Service Address (ESA).

For all our long-standing clients, you already have an ESA – we organised it for you. We pay for your subscription to your ESA and it’s complimentary.

Deanne Thomas & Co. clients – you may have an Aus Post ESA. The Aus Post ESA is being discontinued and you can no longer use it. If you have an Aus Post ESA contact me and I can set you up with our ESA (yep… free of charge).

MAKE SURE YOUR PAYROLL DEPARTMENT HAS YOUR UP TO DATE INFO:

Employers need the fund name, ESA ABN, Bank account details etc. if they don’t have these, they can’t pay you. Make sure your payroll department has up to date info by writing them an email that says “Can you please confirm that my super contributions are being successfully made using Superstream and are being accepted by the fund”.

If they say no, let me know – we can give you a letter to give to your payroll department that has everything they need to know.

MAKE SURE YOU LODGE YOUR TAX RETURN ON TIME!

This is the big one and one that we know will catch people out. Employers are not allowed to make contributions to non-complying funds. To make sure they don’t breach this rule, when they try and make a payment, the payroll system will automatically check a website called ‘superlookup’… if your fund isn’t listed on it – or has the status ‘Regulation Detailed Removed’ the payroll system will automatically not pay the contribution to the fund and the employer will instead try and pay it to the stapled or default fund.

Regulation Details Removed status occurs when you are ONLY TWO WEEKS OVERDUE IN LODGING THE ANNUAL RETURN!!!

This will mean it is so much more important to get your SMSF lodged on time!

BUSINESS OWNERS:

If you are also an employer – please speak to your business accountant to make sure you are up to date from the business side of things… the big sleeper here is that the small business clearing house is being wound up and you won’t be able to use it! You will need to have a commercial clearing house.

Daniel