Employee Super Choice rules changes from 1st November
Superannuation will be stapled
A new employee joining from 1st November 2021 onwards, will be complied with the new choice of superannuation fund rules. Employers need to take an extra step while onboarding new employees and if the choice requirements are not met, penalties will be applied for the employers.
At present, for a new employee, on the time of joining, if they don’t select the super fund -employers can add them to their default superannuation fund account. However, going forward from 1st November this will not be applicable.
From 1st Nov 2021, if a new employee has not chosen a fund, then the employers need to contact Australian Taxation Office (ATO) and check if the employee has a “staple Fund”. If he has a staple fund, then the employer must contribute to the “staple fund”.
Super is an amount set aside from the salary so that an individual will have money to live off when they retire. It is mandatory for all the people working and residing in Australia, this applies to all the Casual, part-time, and full-time employees. The withdrawal of Super can be done only under certain circumstances like when you retire or turn 65 years old. A certain percentage amount of the employee’s salary is paid off by employer to their nominated account.
A staple fund is an existing super account that is linked or stapled to an individual employee, and it follows even when employee changes the job. This process is done to reduce the paperwork, duplication and to avoid multiple sets of super fees. The super payments will automatically deposit in the employees existing account.
To get details of the employees “staple fund “the employer needs to use ATO online service, this needs to be done after the employers submit the Tax file declaration number or Single Touch payroll to ATO.
Steps to be followed by the employer for requesting the employees’ staple fund to ATO
- Login in to ATO online service
- Enter the following employee details:
- Full name including the other name if provided by the employee.
- Date of Birth
- Tax File Number (TFN)
The employers will receive the “staple fund” details within minutes after submitting these details and simultaneously ATO will notify employees of the request and fund details provided to the employer.
This change of rule has been made to avoid an individual from having multiple superannuation funds and to reduce the associated cost involved while setting up new funds for an employee. For this super choice, rule change employer can check and update the access levels of the business -authorized representatives in Online services and this will also protect the employee’s personal information.
For handling Tax and Super employers can take help from registered tax agents and BAS agents. Employers will be able to request stapled super fund details for new employees via online services for business. Bulk requests for up to 100 new employees also can be made by the employers for the staple fund to the ATO.
For more information on Super and Staple Fund request details please visit the ATO website.
*NETCorp is not an accounting firm, HR specialist, or financial advisors and therefore we encourage you to do your on fact finding research