What is a Stapled Super Fund? [Nov 2021 ATO update] (Australia)

From November 2021, if employees do not provide their own super fund details, employers are required to make super fund payments into an employee’s ‘stapled super fund’ as identified by the ATO.

Your obligations

As an employer, you are always required to contribute payment of superannuation towards retirement funding for your employees, even in circumstances where the employee doesn’t themselves identify their own super fund.  Failure to do so means you will be up for additional ATO paperwork and payment … to the ATO … of the Superannuation Guarantee Charge (SGC).

It is not OK to not pay employee superannuation when they do not identify the fund themselves.

Payments to be made into employees ‘Stapled Super Fund’

From 1 Nov 2021, you’ll have an extra step to take if you have new employees who start from 1 November 2021 and they don’t choose a super fund. You now need to request their ‘stapled super fund’ details from the ATO so that their super can be paid into that account for your employee.

The change was introduced to reduce account fees by stopping new super accounts from being opened every time an employee starts a new job, and also to reinforce that super must be paid.

What is a stapled super fund?

This is an existing super account which is linked, or 'stapled', to an individual employee so that it follows them as they change jobs.

What you need to do from 1 Nov 2021

You will need to request stapled super fund details from the ATO when:

  • your new employee starts on or after 1 November 2021
  • you need to make super guarantee payments for that employee, and
  • your employee is eligible to choose a super fund but doesn’t.

Implementing the new rules

Step 1: (As always, and by far the easiest approach) Offer your eligible employees a choice of super fund by having employees complete a Superannuation standard choice form.

If your employee has chosen a super fund, you can pay super contributions to the chosen fund.

Step 2: (If your employee does not nominate a super fund) Request stapled super fund details from the ATO.

If your employee doesn’t choose a super fund, you, or your tax agent, will need to contact the ATO to request the employee’s stapled super fund details.   If you request this of them, the ATO can notify your employee of the stapled super fund request and the fund details the ATO have provided. 

Step 3: Pay super

  • Into the employees nominated fund, for employees that have provided their super fund details
  • Into the stapled super fund, as identified by the ATO where the employee has not provided details and the ATO has provided details.
  • Into your default company fund, only where the employee has not nominated a fund and the ATO have advised that they don’t have a stapled super fund.

Again, It is not OK to not pay employee superannuation. The SGC and penalties will be applied.

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