In an industry that hasn’t exactly been characterised by constant change, from 1 November 2021 we have seen yet another change to superannuation rules here in Australia.
The 1st November sees the commencement of an additional step in setting up new employees and their compulsory superannuation guarantee – it’s called Super Stapling.
Whilst it’s a funny term, put simply, a stapled super fund is simply an existing superannuation account that an employee has which is linked, or 'stapled', to that individual employee. Effectively this superannuation fund follows the employee as they change jobs – it’s stapled to them.
From 1 November 2021, if you have a new employee start with you, and they don't choose or nominate a superannuation fund, you have an extra step to take to comply with choice of superannuation fund rules. Rather than just setting that employee up in your default super fund that your business uses, you will need to check, via the ATO, whether that employee has a stapled super fund, and if so, you’ll need to make contributions to that stapled fund.
This effectively adds a step to the new employee payroll set up process. The initial process really doesn’t change. When you are bringing a new employee into your business you provide them with a Choice of Superannuation Fund details form, just like normal, with their other payroll paperwork.
If they return the form with a super fund nominated, provided that fund complies, you make superannuation fund contributions to that fund that they have nominated.
If they don’t nominate a fund though, so they return the form blank, this is where there is an extra step. At this point you’ll need to login to the ATO, and in the online services area you’ll need to request stapled super fund details for the employee. In order for the ATO to run this check, you will have needed to already submitted the Tax File Declaration form details, so make sure you’ve done this first.
From there, the results should appear on the screen within minutes. The ATO matches up the tax details with any stapled super fund details they have on file for this employee.
You will be told whether there is a stapled super fund for the employee. If there is, the details of this fund will be displayed, and you’ll need to make superannuation contributions for this employee to this stapled fund. If there is no stapled super fund, you are fine to make contributions to your default super fund like normal.
Whilst this is absolutely another step for employers, which always feels difficult, this is compulsory and there are penalties if you don’t comply. If you’re really not sure what to do, or want someone else to do this step for you, chat to your Tax Agent (usually also your accountant), and they are likely to be able to do this on your behalf.
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