Recruiting new employees? The 1 November superannuation rule changes

Changes from 1 November 2021 to superannuation rules

When your business hires a new employee, the Choice of Fund form is used to identify where they want their superannuation to be directed. If the employee does not identify a fund, generally the employer directs their superannuation into a default fund.

From 1 November 2021, where an employee does not identify a fund, the employer is required to contact the ATO and request details of the employee’s existing superannuation fund or ‘stapled’ fund (the fund stapled to them). The request is made through the ATO’s online services through the ‘Employee Commencement Form’.

If the ATO confirms no other fund exists for the employee, contributions can be directed to the employer’s default fund or a fund specified under a workplace determination or an enterprise agreement (if the determination was made before 1 January 2021).

New employee key points

To ensure the commencement of an employee’s employment is streamline for both the employer and the employee, the ATO have made some of the forms electronic that are required to be completed. When a new employee starts a new job, they may now be able to lodge some of their commencement forms online. The forms are:

• Tax file number declaration

• Superannuation (super) standard choice

• Withholding declaration

• Medicare levy variation declaration.

These online forms are not only for new employees. These forms can also be used when an employees circumstance changes. A new form may required and the employer may need to recalculate how much tax to withhold from payments made to employees.

Employees can now access and complete pre-filled commencement forms through ATO online services via myGov. It is recommended that the employee talks to the employer first before completing these online forms.

Once any of the online forms are completed, a copy must be provided by the employee to the employer.

The employer will enter the information into their system and keep a copy of the form for their records. Employers do not need to send the printed form to the ATO.

If an employee makes a mistake in the form, they can update it in ATO online services and provide a new version to their employer.

More information on this topic can be found online with the ATO.