• New Wave Accountants

Super Stapling: What It Is and What It Means for Employers

One certainty in business is that there is no certainty. One new change in requirements for businesses is that they will need to ask the ATO for a stapled super fund statement whenever a new employee starts with the company and doesn’t choose a super fund for their Super Guarantee contributions. The new requirement went into effect on November 1, 2021.


Super Stapling: What It Is and What It Means for Employers


What is super stapling?


Super stapling is the process of the Australian tax office (ATO) informing a business of a person’s super fund status when they are not a super saver. Stapling is not a super saver or a super fund but a process where the employee is not given the option of making a decision on the super fund they do or do not want to be part of.


The ATO will be sending the employee a ‘Statement of Compliance’, which includes their super stapled fund details. If the person is not happy with the super fund they will be stapled to, they can ask for the stapling to be removed. It is important for business owners to understand the implications of super stapling as it can have a significant impact on employees.


What does it mean for businesses?


Super stapling is designed to be a time-saving mechanism for businesses. This means businesses can avoid having a conversation with employees about their super, so they don’t have to handle the complexity of the super system themselves.


Employees, however, may not be happy with the super fund they are stapled to. If they want to change the fund or want to choose a different super fund, they can make the change after their first year with the business. Employees will need to ask their employer to fill out a notification of contribution form. This can be done in the first four weeks of their employment as long as they do not make any contributions before the form is completed.


What to do now


Businesses need to make sure they have updated their superannuation information to the ATO if they are a member of a super fund. This can be done online. All businesses need to make sure that if they are part of a super fund and have employees, their super funds are up to date in their PAYG payment summaries and are properly completed.


It is important for owners to realise that if there is a suspicion that their employees are not happy with the super that they are stapled to, they may consider making a full contribution to the super fund that they are stapled to and avoid the hassle of changing super funds.


Business owners also need to consider the reporting implications as they will need to be able to show that they have given the super statements to their employees and that they have contributed to their super fund.


Conclusion


On the surface, super stapling looks like a time and trouble saving mechanism for business owners. The reality may be that it puts more pressure on both employees and owners.


Business owners should understand the implications of super stapling before changing from a super fund to super stapling and make sure that their employees are aware of the option to change their super fund or ask for their stapling to be removed.


If you are still needing assistance understanding this new change, working with a business accountant from New Wave Accounting is the way to go. Let us help you transform your business today!


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