Super stapling: employer obligations from 1 November 2021
How super stapling works under the Your Future, Your Super reforms: employers must request an employee's stapled fund via ATO online services before using a default fund.
What stapling is
Super stapling commenced on 1 November 2021 as part of the Your Future, Your Super reforms (Treasury Laws Amendment (Your Future, Your Super) Act 2021). It aims to address the policy concern that workers were accumulating multiple, fee-eroding default accounts. A ‘stapled fund’ is an existing super account linked to an employee, which follows them as they change jobs. Super contribution caps FY27 may be relevant when considering long-term superannuation strategies.
The ATO determines which super account is the stapled fund, using a hierarchy. This hierarchy prioritises the most recently received contribution, then the most recent account creation, and finally the account balance.
Employers have obligations regarding new employees who do not make a choice of superannuation fund. They must request stapled fund details before contributing to their default super fund.
When employers must check for a stapled fund
Employers must check for a stapled fund when an employee commences employment on or after 1 November 2021 and does not nominate a superannuation fund using the Superannuation Standard Choice Form. This obligation arises after the employer submits a Tax File Number (TFN) declaration or a Single Touch Payroll (STP) pay event identifying the employee. Employers should ensure they are familiar with SuperStream employer super contributions requirements.
The process for requesting a stapled fund involves utilising ATO Online Services for Business or engaging an authorised tax/BAS agent with appropriate access. The ATO typically provides the stapled fund result quickly, often within minutes. Employers with a large number of employees can submit requests in bulk for more than 100 individuals.
If the ATO advises that no stapled fund exists, the employer is permitted to make superannuation contributions to their default fund.
Special cases and exemptions
Certain employees may be subject to existing fund nominations due to enterprise agreements. If an employee is covered by an enterprise agreement made before 1 January 2021, the agreement’s fund nomination may continue to apply until the agreement is varied. This is in addition to understanding OTE vs QE: payday super explained.
Defined benefit fund members and some Commonwealth public sector employees are excluded from the super stapling process. Additionally, temporary residents on short stays may not have a stapled fund, requiring employers to default contributions after receiving a ‘no stapled fund’ response.
An employee’s choice of fund, made under Section 32C of the *Superannuation Guarantee (Administration) Act 1992*, takes precedence. Stapling does not override these existing choice of fund rules. From 1 July 2026, the requirements for payday super will require contributions to be paid within 7 days of payday, highlighting the importance of accurate fund selection.
Penalties and recordkeeping
Failure to request a stapled fund when required may result in the ‘choice shortfall’ penalty under the Superannuation Guarantee Administration Act. This penalty can be up to 75% of the superannuation guarantee shortfall for the period. Penalties also apply to employers who fail to provide a choice notice, in addition to the standard superannuation guarantee charge (shortfall + interest + admin component) for unpaid super. SuperStream rollovers and ESA for SMSFs provides further information.
Employers must maintain records relating to super stapling. Specifically, a record of each stapled fund request and the ATO response should be retained for at least 5 years.
If an employee subsequently selects a different superannuation fund, future contributions must be directed to that chosen fund. Previous contributions made to the stapled fund are not reversed. The ATO has identified employers who continue to default without checking the ATO portal as a compliance focus area.
Frequently asked
Do I need to check for a stapled fund every time an existing employee changes payroll?
No. The stapled fund check is required for new employees who don't nominate a fund. For existing employees you continue paying to the same fund unless the employee gives you a new choice.
What if the ATO returns a stapled fund that won't accept the contribution?
If the stapled fund refuses (e.g. the account is closed), notify the ATO via online services. The ATO may identify another stapled fund or advise you to pay to your default fund.