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Employer super issues

Superannuation clearing houses

Section: 1.7

Instead of making contributions to potentially many different superannuation funds on a regular basis, employers can elect to use a clearing house to manage the distribution of their SG contributions and any voluntary contributions such as salary sacrifice.

A clearing house service involves the employer providing one super contribution to the clearing house provider, which then distributes contributions for each employee in line with choice of fund requirements as notified by the employer. This could include distributing contributions to an employee's chosen fund or the employer's default super fund.

Small business superannuation clearing house

The small business superannuation clearing house was introduced on 1 July 2010 and can be used by any small business employer with less than 20 employees with an aggregated turnover below $2 million. Instead of paying for the use of another clearing house, eligible small business owners can use this facility as a free clearing house to satisfy their SG obligations including managing employee choice of fund.

When are contributions to a clearing house 'made'?

Employer contributions made to clearing houses do not count towards meeting an employer's SG obligation until they are received by the complying super fund (chosen or default). However, an exception applies for small business employers using the small business superannuation clearing house, who have their contributions count for SG purposes when they are received by the small business clearing house.

It is important to note that, regardless of which clearing house is used:

  • for employer tax-deduction purposes, a contribution has not been 'made' until it is received by a complying super fund or RSA, even if the small business superannuation clearing house is used.
  • for contribution cap purposes, an employer contribution will count at the time it has been received by the complying super fund or RSA and has been allocated to the member's account.

Last modified: Tuesday, November 20, 2018