What Your Small Business Needs to Know & What to Do Next
To best support the businesses we work with, we wanted to flag the upcoming changes to the ATO’s Super Clearing House. If your business is like one of the thousands of Australian small businesses that use the ATO’s Free Super Clearing House to process your super payments, then the significant changes the ATO are making will have an impact on you, and your admin procedure will need to catch up.
The Australian Taxation Office (ATO) has announced that from 1 July 2026, its Small Business Superannuation Clearing House (SBSCH) service will cease working.
There is no need to panic, though. While this might sound like a hassle, it’s also an opportunity to review and modernise your payroll processes, potentially saving you time. You have just under a year to make the switch smoothly.
Here we will unpack what is taking place, why it is taking place, and most significantly, what your best options are.
What is ATO’s Clearing House?
Firstly, lets refresh on just what the SBSCH is. It is an open, free service that allows eligible small businesses to pay all their superannuation in one large bulk payment. Instead of needing to access hundreds of super fund sites to pay each individual separately, you pay the clearing house. The clearing house pays the relevant amounts to each of your employees’ desired funds. It is also worth noting that from October 1 this year, new businesses will be unable to register. If you’re in the process of starting or growing your business now, you will need to plan around this and not rely on the ATO’s Clearing House.
The ATO’s reason for closing the SBSCH boils down to progress. They’ve stated that since the service was launched, the market for payroll and super solutions has evolved dramatically. There is now a wide range of user-friendly, affordable, and powerful software options that handle super payments seamlessly as part of the payroll process.
In short, the government is considering that separate clearing houses are no longer the best tool for the job when placed side by side with integrated software that is state-of-the-art.
Many businesses have embedded payroll software into their process, and now, the directive to include super in a lot of ways makes evolutionary sense.
What Can You Do Now?
From July 2026, you will have to find a new means to comply with your Super Guarantee. Below we have listed the most likely contenders to consider:
-
The Front Runner: Integrated Payroll Software (The STP Route)
This is the ATO’s favoured approach and the direction in which most businesses are already heading. If you still manually compute or are depending on spreadsheet software, this change is the best motivation to convert.
New cloud-based software such as; Xero, QuickBooks Online, MYOB, or KeyPay computes super automatically on your behalf depending on the wages that you pay through Single Touch Payroll (STP). When payday approaches, your business authenticates one payment from your bank account, and the software pays money electronically to every person’s super fund.
Why we love it:
- Huge Time Savings: Automates calculations and payments.
- Decreased Errors: Minimises errors in manual data entry.
- Compliance Made Easy: Everything is recorded and reported to the ATO via STP in real-time.
- One-Stop Solution: Runs pays, handles taxes, super, and reporting all under one solution.
-
The Direct Alternative: Another Clearing House Service
If you believe the clearing house model works best for your business, you can potentially switch to another provider. Some banks (e.g. CommBank, Westpac), industry associations, and large super funds (such as Australian Super) offer their own clearing house services, typically for no cost.
Like the ATO’s system, this process is similarly easy. You can give them a file or manually enter the details of the super contributions, pay in one go, and the service will then undertake all the rest.
Advantages
- Routine Process: Requires the least change to your everyday schedule.
- Often Free: Many are still free to use.
- Good Interim Option: Useful if you are not yet ready to move to full payroll software.
-
The Traditional Method: Paying Each Fund Directly
Alternatively, you can choose to pay each person’s super fund yourself. This is the manual method and is generally not preferable for any organisation that has more than just a few employees due to the extremely high error rate, payroll freezes, as well as the enormous admin time that this consumes.
What to Do Before July 2026
It would be unwise to pretend this isn’t happening. Set July 2026 in your calendar. The deadline will arrive whether you are prepared or not. Depending on your business and your peak busy times, it may be wise to prepare now or aim to be ready by February 2026 at the latest. The longer the lead-in time, the better the buffer to iron out any glitches and be confident in your new approach well in advance of the deadline.
Audit Your Present Process:
What is your current payroll and super procedure? Are you doing it efficiently?
Your Step-by-Step Guide to a Smooth Transition
You’ve got the deadline: July 1, 2026. That might feel like a long way off, but the businesses that treat this as an opportunity, not an obstacle, will be the ones who win. The goal isn’t just to find a replacement; it’s to find a better way of doing things. If you are unsure of the next steps, we’re here to work with you. Making an appointment with your accountant or business advisor could help work through your current process, find inefficiencies, and create a plan to transition.
Here’s how to execute that perfectly.
Do Your Homework (This is Your Most Important Task)
Don’t just grab the first software you see advertised, or go with the first cold call you receive. This is a chance to choose a partner that will handle a critical part of your business for years to come. Shopping around requires a strategy.
Define Your Needs and Wants: Before you even look at the options available to you, check in with your accountant or bookkeeper. Some key factors need to be known.
- Number of Employees: Are you a sole trader or do you have a team of 15? This can dramatically affect pricing tiers.
- Current Pain Points: What frustrates you most about your current process? Is it data entry, chasing timesheets, or double-handling information?
- Must-Have Features: Do you need integrated invoicing, stock management, advanced reporting, or multi-currency support? Or do you just need a stable and steady payroll and super?
- Budget: Be realistic as to what you can afford and also the value in cost. While most quality software is a monthly subscription, remember to factor in the value of the time you’ll save.
The “Free Trial” Deep Dive: Most providers offer free trials; take advantage of them. Don’t just wander around their portal for 5 minutes. We advise our clients to do the following:
- Load Real Data: Create a test company and input your actual employee details and pay rates. This is the only way to get a true feel for the workflow.
- Run a Test Payroll: Process a mock pay run for a few employees from start to finish. How intuitive is the process of adding hours, calculating pay, and generating payslips?
- Test the Super Functionality: This is the whole point! Go through the steps to approve and pay super. How does it connect to your bank? How does it confirm that the payments have been sent to the funds? This is the core functionality you’re replacing.
Consult Your Financial Yoda: Your Accountant or Bookkeeper: This might be the best piece of advice you get. Your accountant likely has a bird’s-eye view of the entire software landscape. They can tell you:
- Which platforms integrate seamlessly with their systems, allowing for smooth end-of-year reporting and BAS.
- Which software is most suited to your specific industry (e.g., hospitality, retail, professional services).
- The common pitfalls they see other clients make, helping you avoid them.
- They might even have access to partner discounts you wouldn’t get on your own.
Choosing software that “feels like second nature” is about more than a pretty home page; it’s about how logically it fits into your business’s unique rhythm.
Make a Decision and Deploy (The Execution Phase)
Once you’ve chosen your solution, the real work begins. “Implementing well before the deadline” is non-negotiable. We’re not talking about starting on June 28, 2026. Aim to be fully operational and confident on your new system by January 2026 at the latest. This gives you a six-month buffer to work out any kinks without the pressure of a hard deadline.
The Phased Rollout: Don’t try to switch everything over in one chaotic afternoon. Plan a phased approach:
- Week 1-2: Data Migration & Setup: Meticulously input all your employee data, pay rates, super fund details, and tax file number declarations. Double-check everything for accuracy. Set up your chart of accounts and link your business bank account.
- Week 3: Dry Run: Process a complete pay run in the new system without actually sending money. Generate the payslips and review them for errors. Have your bookkeeper check the output.
- Week 4: First Live Pay Run: Process your first real, but small, pay run. This could be just for yourself or a few key employees. Confirm that the bank payments and super payments go through correctly.
- Week 5 onwards: Full Adoption: Once you’re confident, migrate your entire team over.
The Critical Step of Communication:
This is often overlooked but is vital for maintaining trust with your team. A simple email or conversation can prevent a lot of anxiety and questions.
Subject: An update on how we manage pay and superannuation
- “Hi team, as part of a move to more efficient systems, we’ll be upgrading our payroll software in the coming months.”
- “This is a positive step that will help ensure even greater accuracy and timeliness with your pay and super.”
- “You don’t need to do anything. The only change you might notice is that your payslips will have a new look and feel starting from [Date].”
- “Please feel free to come and see me if you have any questions.”
This transparent approach manages expectations, especially if paydays shift slightly during the transition as you learn the new system’s payment processing times.
The Bottom Line: This is a Genuine Upgrade
Framing this change correctly is crucial. The closure of the ATO’s clearing house isn’t an ending; it’s a necessary push into a more modern, efficient, and integrated way of running your business.
While it requires an upfront investment of time and a small monthly fee, the return on investment is substantial:
- Time Saved: The automation of calculations and single-click payments will reclaim hours every month, hours you can spend on growing your business or, better yet, with your family.
- Risk Reduced: Integrated payroll software drastically reduces the risk of human error, late payments, and subsequent penalties from the ATO. It keeps you compliant effortlessly through constant STP reporting.
- Stress Eliminated: Knowing your payroll is handled accurately and on time, every time, is a huge mental weight off your shoulders.
Use this mandated transition period not as a compliance chore, but as a strategic project to streamline your operations. Your future self, the less-stressed, more efficient business owner, will look back and thank you for taking it seriously.
If you’re not sure about the best way ahead or want expert help to look at your choices and make a smooth switch, the team at Roger Boghani & Co. is ready to assist. Get in touch with us now to book an obligation-free consult. Let’s turn this transition into the best upgrade yet.
