Changes for paying super to employees
In the 2020 – 21 federal Budget, the Government announced the Super Reforms — Your Future, Your Super (YFYS) — measure. This is one of the most significant changes to the way the superannuation system works and has been designed to help protect the retirement savings of working Australians.
The measure has four key elements:
A new YourSuper comparison tool for individuals to be able to compare key data on MySuper products.
From 1 November 2021, where new employees do not choose a super fund, most employers will have to check with the ATO if their employee has an existing super account (known as a “stapled super fund”) to pay the employee's super guarantee into (more on this further down).
A change to the duties of trustees of superannuation funds to act in the best financial interest of their members.
A new super fund underperformance assessment to be conducted by APRA and published on our website.
The measures commence on 1 July 2021, except for Schedule 1 (the single default account or “stapled super fund” measure) which commences on 1 November 2021.
Important info for employers
As a result of YFYS, every time a person starts a new job, their employer has to offer them two superannuation options. Either having their compulsory superannuation guarantee contributions deposited into the employer’s default super fund, or in an alternative fund of the employee’s choosing.
From November 2021, the legislation ensures that unless an employee chooses otherwise, their active super account — or the first fund they join when they start work — will follow them throughout their working life, no matter the job or the industry they are working in or if the fund is a poor-performing fund. In other words, the employee has one fund for life.
In the legislation, this is called “member stapling”, and its purpose is to prevent a person having multiple super funds. Multiple funds have multiple fees and unnecessarily reduce retirement savings. This is the important part — it’s an employer’s responsibility to search and check with the ATO if their new employee has a “stapled” super fund and ensure that future SG contributions are paid into it.
Want to know more?
As an employer, it’s hard to stay on top of the Government’s constantly evolving legislations and legalities. We can help you straighten things out and get a clear picture of your responsibilities to your employees.
Contact us to get started.
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If your business provides a car to an employee (or you’re the business owner/employee using it), there’s a good chance the Fringe Benefits Tax (FBT) rules apply. A car fringe benefit arises when a car owned or leased by an employer is made available for the private use of the business owner, an employee or their associate (such as a family member). “Private use” doesn’t just mean weekend road trips — it can include everyday commuting and even cases where the car is parked at an employee’s home, making it available for personal trips. Understanding how FBT is calculated and what records to keep is essential for compliance — and for avoiding paying more tax than necessary. What counts as a “car” for FBT purposes? The FBT law defines a car as a motor vehicle (except a motorcycle or similar) designed to carry less than one tonne and fewer than nine passengers. From 1 July 2022, some zero or low-emission vehicles are exempt from FBT, provided they meet certain criteria — for example, they must be first held and used after 1 July 2022 and must not have attracted Luxury Car Tax. Electric vehicle running costs, such as charging, are also exempt when the vehicle itself qualifies. Two main methods for calculating FBT on cars There are two ways to calculate the taxable value of a car fringe benefit. 1. Statutory formula method This method applies a flat 20% statutory rate to the base value of the car, adjusted for the number of days in the FBT year the car was available for private use. The formula is: (A × B × C ÷ D) − E A = Base value of the car (cost price plus GST and certain accessories, less registration, stamp duty and eligible reductions) B = Statutory fraction (generally 20%) C = Days available for private use D = Total days in FBT year (365) E = Employee contributions If the car has been owned for at least four full FBT years, the base value can be reduced by one-third. 2. Operating cost method This method calculates the taxable value by applying the private use percentage to the total operating costs of the car (actual and deemed costs). The formula is: Taxable value = [Operating costs × (100% − Business use %)] − Employee contributions Operating costs include: Fuel, oil, repairs, maintenance, registration and insurance Lease costs (for leased cars) Deemed depreciation (25% diminishing value) and deemed interest for owned cars Certain costs, such as tolls, car parking and insurance-funded repairs, are excluded. The business use percentage is determined by odometer readings, logbook records, and a reasonable estimate based on usage patterns. The three-month logbook requirement (operating cost method only). If you use the operating cost method, you must keep a logbook for at least 12 continuous weeks (roughly three months) to record: The date of each trip Odometer readings at the start and end Total kilometres travelled Whether the trip was for business or private purposes The purpose of each business trip This logbook is generally valid for five years, but you must start a new one if usage patterns change significantly (e.g., a role change, relocation or different duties). You also need to record odometer readings at the start and end of each FBT year. Why record-keeping matters. Keeping accurate records can support a higher business use percentage (and therefore a lower FBT bill). They also ensure you claim only legitimate business kilometres and help you provide evidence if the ATO reviews your FBT calculation. Finally, your records help you decide which calculation method (statutory or operating cost) is more tax-effective. Key takeaways for businesses and employees. If a car is available for private use, FBT may apply — even if the car isn’t driven often for personal trips. Electric cars may be FBT-exempt if they meet eligibility criteria, but you may still need to calculate their taxable value for reporting purposes. The operating cost method often works better if business use is high — but only if you have a compliant logbook. Keep odometer readings, expense records and a valid logbook to support your claims. Need help with your FBT obligations? Get it at Ascent Accountants. We guide business owners through every step of FBT compliance — from choosing the right valuation method to maintaining the right records for ATO peace of mind. If you provide cars to employees or use a company vehicle yourself, now is the time to review your FBT position before the next FBT year rolls over. Let’s talk .
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