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Keeping good records is an essential part of meeting your Superannuation Guarantee (SG) obligations for your employees.
Even if you pay your super contributions and report the relevant data to the ATO every quarter, it’s still important to ensure you have the necessary paperwork to support your payments and answer any questions if you are audited at a later date.
Check out this simple guide to the key things you need to know when it comes to your super recordkeeping.
What are the basics of business recordkeeping?
A business record explains the super and tax-related transactions conducted by your business.
Your records must contain enough information for the ATO to determine the essential features and purpose of transactions you have made so it can understand their relevance to your business’s income and expenses.
At a minimum, your records must contain the date, amount and character of each transaction, 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 the choice of super fund into which you will pay their SG contributions.
If you make super contributions under an award or employment agreement, you may have additional recordkeeping obligations. Check your relevant award or regulation.
Records about the super contributions you make for your employees
The ATO requires you to keep records that explain all the transactions you make in relation to your employees’ super.
Even if you use a clearing house to distribute your super payments and data to your employees’ chosen super funds, you are still required to keep adequate records about the SG payments.
When you are required to make super contributions for your employees under an award or employment agreement, there may be additional recordkeeping obligations imposed on employers, so you need to check the relevant award or regulation.
Records for super contributions
| Information your records need to show | Examples of records |
|---|---|
| How you worked out the amount of super you contributed for each employee. | Bank statement showing payment to a super fund, Retirement Savings Account (RSA) or super clearing house. |
| Factors affecting the amount of super you must contribute, such as advice you have received from trustees about the super funds to which you contribute. | Confirmation from a SuperStream-compliant payroll system, super fund online system or super clearing house showing a successful payment. |
| Salary sacrifice amounts, including information about how they are calculated and your employee’s choice. | Receipts or other documents issued by super funds showing you have made super contributions for employees to their chosen super fund. |
| 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. | Contribution receipts showing the date, contribution period, amount, fund and member account number for each employee. |
| Documents that show how you worked out the amount of super paid for each employee. | |
| Documents required to work out the SG shortfall for an employee for a quarter. |
Source: ATO
Choice of super fund and your employees: Records you need to keep
Employers are also required to keep detailed records about the choices their employees make about the super funds into which they want their SG contributions made.
Records for super fund choice
| Information your records need to show | Examples of records |
|---|---|
| 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 eligible employees the choice. – Of the written information provided by an employee nominating their chosen fund or RSA. | Completed superannuation Standard Choice Form Evidence you have given the Standard. |
| For employees who are not eligible to choose their super fund, keep records of: – Why employees haven’t been offered a choice. – Which employees you don’t have to offer a choice of super fund to. | Choice Form to all eligible employees (for example, you may issue this form by email and retain copies of the emails). |
| You also need to keep records confirming: – Your nominated (default) super fund offers a MySuper product. – The super fund meets specific requirements and obligations under super law. | Details of any employees to whom you do not have to offer a choice of super fund. |
Source: ATO
How long to keep your records
Records in relation to both your employee’s super fund choice and the super contributions 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.
Super fund choice records 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.
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 funds.
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If you fail to maintain the necessary SG records, the maximum fine is 30 penalty units ($222 per penalty unit in 2020/21). You may also be liable for an administrative penalty of 20 penalty units.