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Super Salary Sacrifice |
  
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Super Salary Sacrifice |
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Introduction
A salary sacrifice being attributed to a superannuation fund is achieved in e-PayDay® via the setting up of a deduction.
Setting up the Deduction
1.From the main screen click on the 'Pay Types' picture button. This takes you to the Pay Types window
2.Click on the 'Add' button to the right of the list.
3.This takes you to the details of this new Pay Type as per below
Fill in the fields as per the following
Active – Yes, since we are definitely going to use this deduction
Type – Deduction, as we are taking away money from the employee's gross pay
Description – This can be anything that has meaning to this situation. For example, "Salary Sacrifice <employee's initials>"
Deducted By – Per Pay Period or Per Lump Sum. If this salary sacrifice is a one off, then make it deducted by "Per Lump Sum". If salary sacrifice is made every pay period then make it deducted by "Per Pay Period".
Value – Type in a dollar sign, followed by the dollar amount of this salary sacrifice.
Salary Sacrifice (Deduct BEFORE Tax is Calculated) – Click into this box to put a cross in it, as the deduction we are making is BEFORE tax.
Report to – Click into this field and type in an identification that you can use to track this deduction and produce a report on it's use. See Tracking Pay Types for further information on this.
Deductions – Most of the boxes are greyed out; we have a choice of either "Superannuation" or "Union". Seeing as if this deduction is for superannuation, click into the 'Superannuation' box to put a cross in it.
Arranging for the Deduction to Appear Automatically in the Employee's Pay Envelope
If the deduction is to come out every pay period then it can be arranged to appear automatically in the employee's pay envelope upon entering it. In other words, this saves you from having to remember to put in the deduction each pay period. Once the deduction has been set up as per above, follow the instructions below
1. From the main screen of e-PayDay®, click on the 'Employees' picture button
2. Find the employee in the list and double click on their name.
3. You are now in the first set of tabs of this employee's details. Go to the 'Pay Types and Cost Centres 6' tab.
4. Click on the down arrow next to 'Available Deductions'
5. Click on the deduction you would like to see come up automatically in this employee's pay envelope.
6. This deduction's pay type number will now appear in 'Selected Deductions'
7. Click on 'OK' (bottom right)
Member Superannuation Fund
In the Superannuation 1 Tab of the employee's details (accessed via the 'More' button) make sure the employee is linked to a 'Member Super Fund' – bottom left of that screen.
Reporting of the Super Salary Sacrifice
As well as the 'Employer Periodic Superannuation' report that is usually printed at the end of the month, an 'Employee Periodic Superannuation' report will also need to be printed. Unfortunately, there is not a single report which includes both SGL and salary sacrifice figures.
SGL on Salary Sacrifice ?
SGL is the abbreviation for the mandatory contributions to super funds that employers make on behalf of their employees and is usually a percentage of their ordinary tim earnings. When salary sacrifice is introduced into the picture, a question arises: does the employer apply the SGL percentage to the gross pay before or after the salary sacrifice is taken out ?
To answer the question consult the ATO and the superannuation fund in question.
Whatever the result, it is implemented in the actual award that the employee is linked to.
1. Click on the 'Awards' picture button, at the top of the main screen of e-PayDay®
2. From the list of awards, double click on the award the employee is linked to
3. Select the 'Superannuation 3' TAB
4. At the bottom of the TAB is a question: SGL on Salary Sacrifice ?
5. Select 'Yes' or 'No' from the drop down box to the right
Selecting 'Yes' will mean the SGL is calculated before the salary sacrifice is taken out and vice versa for 'No'.
6. Click on 'OK' to save your changes.