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If you’re an employer, keeping good records about the Superannuation Guarantee (SG) contributions you make on behalf of your employees is essential.
Like most business records, you must maintain detailed information about all the super contribution payments you make and their supporting calculations if you don’t want to run into problems with the ATO down the track.
What are the basics of business record-keeping?
A business record is all about recording, managing and substantiating any transaction conducted by your business.
It’s the same with the super and tax-related transactions you completed to meet your legal obligations to your employees.
Your super-related records need to contain enough information for the ATO to determine the essential features and purpose of the transactions you have undertaken, so it can understand their relevance to your business’ income and expenses. They also need to prove you have met your super obligations and followed the various rules in this area.
At a minimum, your records must contain the date, amount and character of each super contribution, the purpose of the transaction and, if relevant, the relationships between the different parties to the transactions.
Keeping records about your employees’ super
Under super law, you must keep records showing:
- How much Super Guarantee (SG) you paid for each employee and how it was calculated.
- You have offered each eligible employee choice of the super fund into which you will pay their SG contributions.
- You have made a stapled super fund request to the ATO for new employees who commenced after 1 November 2021 and did not choose a super fund.
- Details about any reportable employer super contributions (RESC) that are not included in your employee’s assessable income.
RESC amounts do not affect the way you calculate SG contributions for your employees.
Your RESC records must show whether your employee influenced the super contributions you made on their behalf and how you calculated their RESC. Records outlining the employee’s salary or ordinary time earnings (OTE), salary-sacrifice agreements and industrial agreements are also required.
Recording the super contributions you make
The ATO requires you to keep records explaining all the transactions you make in relation to your employees’ super.
Even if you are using a clearing house to distribute your super payments and SG contribution data to your employees’ chosen super funds, you’re still required to keep adequate records about SG payments.
When you are required to make super contributions for your employees under an award or employment agreement, there may be additional record-keeping obligations imposed on employers. You will need to check the relevant award or regulation for details of these obligations.
Records for super contributions
Information your records need to show
- How much SG you paid for each employee in a quarter and annually
- How you worked out the amount of super you contributed for each employee.
- Factors affecting the amount of super you must contribute (such as an employee’s OTE, overtime and allowances)
- Salary-sacrifice amounts (including information about how they are calculated and your employee’s choice)
- If you fail to meet your super obligations and are liable to pay the Super Guarantee Charge (SGC), you must keep details of how you worked out the amounts shown in your SGC Statement
Examples of suitable records
- Bank statement or electronic payment receipt showing payment to a super fund, Retirement Savings Account (RSA) or super clearing house
- Documents showing how you worked out the amount of super paid for each employee (hours worked and OTE for each employee)
- Documentation proving an effective salary sacrifice arrangement is in place
- Confirmation from a SuperStream-compliant payroll system, super fund online system or super clearing house showing a successful payment for your super contributions
- Receipts or other documents issued by super funds showing you have made super contributions for employees to their chosen super fund
- Contribution receipts showing the date, contribution period, amount, fund and member account number for each employee
- Documentation supporting your calculations to work out the SG shortfall amount for an employee in a particular quarter
Choice of super fund: Records you need to keep
Employers are also required to keep detailed records about the choices their employees make regarding the super funds into which they want their SG contributions made.
You must provide your employees who are eligible to choose their super fund with a Standard Superannuation Choice Form within 28 days of their start date, unless they give you details of their chosen super fund first.
Your current employees who are eligible to choose their own fund can do so as often as they wish, but you are only required to accept a new choice once in any 12-month period. If your employee requests a Standard Superannuation Choice Form, you must provide it within 28 days.
As an employer, you are required to keep a copy of your employee’s completed Standard Superannuation Choice Form for five years, but you don’t need to send a copy to the ATO.
Since 1 November 2021, employers are also required to request details of a new employee’s stapled super fund from the ATO if they don’t make a choice of super fund. You may be penalised if you don’t request this information, or if you fail to pay your contributions into the employee’s identified stapled fund.
Records for super fund choice
Information your records need to show
For employees eligible to choose the super fund they want you to pay super contributions into, you need to keep records:
- Showing you have offered them choice of fund by providing them with a Standard Superannuation Choice Form
- Detailing the employee’s nominated super fund or RSA
- Demonstrating your stapled super fund request to the ATO for new employees who have not made a choice or why you have not made a request (for example, the employee already made a choice of super fund)
For employees who are not eligible to choose their super fund, you need to keep records of:
- Why your employees haven’t been offered a choice of fund
- Employees you are not required to offer a choice of super fund
- Your stapled super fund request to the ATO for a new employee, or why you have not made a request (e.g., you are a government employer, and the employee is required to join an unfunded public sector scheme)
For all employees, you need to keep records confirming:
- Your nominated (default) super fund offers a MySuper product
- Your default super fund meets all its requirements and obligations under super law (such as whether the fund is a complying super fund, registered with APRA and offers a MySuper product)
Examples of suitable records
- Completed superannuation Standard Choice Form
- Evidence you have given eligible employees a Standard Choice Form (such as letters or emails sent to each employee)
- Written information your employee provided when they nominated their chosen fund or RSA
- Details of why an employee is not eligible for choice of fund (such as award or enterprise agreement etc.)
- Details of your written request to the ATO for details of an employee’s stapled super fund
- Results from a check on the Superfund Lookup register of complying super funds
- Written confirmation from a super fund that it’s a complying super fund, intends to accept your super contributions and will continue to meet the relevant legal requirements
- Confirmation your nominated fund offers a MySuper product
How long to keep your records
Records in relation to your employee’s choice of super fund, stapled super fund and the super contributions (including RESC) you make on their behalf need to be kept for five years.
You need to keep super contributions records for five years from the date of the contribution.
Records relating to an employee’s choice of super fund must be kept for five years from the date the employee starts employment with you, or five years from when the employee is offered, chooses or changes their choice of super fund.
Your super records will also be important in substantiating your claim for tax deductions relating to the SG contributions you make each year.
What are the penalties if I don’t keep records?
The ATO may impose penalties on you if you fail to keep appropriate records in relation to your employees’ super contributions and choice of super fund.
If you fail to maintain the necessary SG records, the maximum fine is 30 penalty units ($222 per penalty unit in 2022–23 and $275 per penalty unit from 1 July 2023). You may also be liable for an administrative penalty of 20 penalty units.