How to keep good records for your employees’ super contributions

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 a 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 started after 1 November 2021 and did not choose a super fund
• Details about any employee salary sacrifice to super and additional employer contributions that are reportable employer super contributions (RESC).

Your RESC records must show whether your employee influenced the super contributions you made on their behalf and how you calculated their RESC.

Recording 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, including your calculation of their qualifying earnings
• Factors affecting the amount of super you must contribute (such as an employee’s OTE, overtime and allowances, advice you have received from trustees of the funds to which you contribute)
• 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, components of qualifying earnings)
• 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.

Source: ATO

Choice of super fund: Records you need to keep

Employers are also required to keep detailed records of the choices their employees make about the super funds they want their contributions paid to.

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 a choice of fund
• Of the written information the employee provided to nominate their chosen fund
• 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 or started working for you before 1 November 2021).

For employees who are not eligible to choose their super fund, you need to keep records of:

Make your super work harder – for free

Get practical, independent guidance to help you grow your balance, save tax and make smarter super decisions with a free SuperGuide account.

Find out more

• Why your employees haven’t been offered a choice
• Which employees you don’t have to offer a choice of super fund to
• Your stapled super fund request to the ATO for a new employee, or why you have not made a request (e.g. they started working for you before 1 November 2021).

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 (i.e. it’s a complying fund).

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, or records from your online onboarding system)
• Details of why an employee is not eligible for the choice of fund (such as an enterprise agreement made prior to 1 January 2021)
• Details of your request to the ATO for details of an employee’s stapled super fund (such as a request submitted to ATO online or via your payroll software/onboarding platform)
• 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 default fund offers a MySuper product.

Source: ATO

How long to keep your records

Records relating to your employees’ choice of super fund, stapled super fund and the super contributions (including RESC) you make on their behalf must be kept for five years. Super contribution records must be retained for five years from the date the contribution is made.

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 super 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 of super contributions for your employees and their choice of super fund.

If you fail to maintain the necessary records, the maximum fine is 30 penalty units. You may also be liable for an administrative penalty of 20 penalty units.

7 tips for your super transaction record-keeping

1. Keep records for all transactions that relate to starting, running, selling and closing your business if they relate to an employee’s super (such as their employment dates, pay rates and any termination or redundancy calculations and payments).
2. Even if you use a clearing house to distribute contributions to your employees’ super funds, you must still keep adequate records of SG payments.
3. Do not alter any information and store it in a way that doesn’t protect the details from being changed or your records being damaged. The ATO can ask you to demonstrate you have appropriate safeguards in place to do this.
4. Ensure you can reconstruct your original data if your record-keeping system changes over time.
5. Ensure you can provide your records if the ATO asks to see them. Keep information about your record-keeping system so it can be checked to ensure it meets the ATO’s requirements and includes all the relevant details to meet your super and employer obligations.
6. Use an encryption system and password protection if your records are stored digitally. Digital records must be able to be converted into a standard data format, such as Excel.
7. Keep your records in English or a format that can be easily converted into written English.

Source: Adapted from the ATO.