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ANSWER ID:9131

AccountRight Plus, Premier and Enterprise, Australia only

This page describes how to deduct a fixed amount of superannuation from an employee's pay as a salary sacrifice. If an employee wants to salary sacrifice a set percentage of each pay, see Salary sacrifice superannuation (fixed %). If you need to set up employee additional or employer additional super contributions, see Additional superannuation contributions.

The process described below is applicable for employees on either a salary or hourly pay basis. 

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  • The same method applies for employees set up as hourly employees.
  • If an employee wants to salary sacrifice a different amount each pay, setup the superannuation category as described below, then simply enter the salary sacrifice value on their pay when processing your payroll.
  • Need to salary sacrifice something other than superannuation? See Salary sacrifice (Australia onlyemployee purchases).

Setting up salary sacrifice superannuation (fixed $ amount) 

To set up your company file, you first need to set up a superannuation category, and then set up the employee's card for the sacrifice amount. The Salary Sacrifice payroll category may already exist in your software, so you can simply modify this instead of creating a new category.

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Example for steps below

Two employees (Mary Jones and Alan Long) are paid on a monthly basis and both want to salary sacrifice to make payments to their super funds.

Mary wants to salary sacrifice $400 per month, and Alan wants to salary sacrifice $300 per month.

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title1. Set up a 'Salary Sacrifice' superannuation category
  1. Go to the Payroll command centre and click Payroll Categories.
  2. Click the Superannuation tab.
  3. Click New. If the Salary Sacrifice category already exists, click the zoom arrow next to it and go to step 7.
  4. Name the new superannuation category 'Salary Sacrifice'.
  5. Select the applicable Linked Payable Account, for example Superannuation Payable.
  6. Select the Contribution Type as 'Salary Sacrifice (deduction)'.
  7. Set the Calculation Basis to User-Entered Amount per Pay Period. The Superannuation Information window should look similar to the example shown below:
  8. Click Employee and select the applicable employees for this new deduction. In our example this would be Mary Jones and Alan Long.
  9. Click OK to return to the Superannuation Information window, then click Close
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title2. Set up the employee's card for the salary sacrifice amount
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If an employee wants to sacrifice a different amount each pay, you don't need to perform the steps below. Instead, you can specify the salary sacrifice amount on their pay when you process your payroll. Remember that these manually entered deductions need to be negative values. 
  1. Go to the Card File command centre and click Cards List. The Cards List window appears.
  2. Click the Employee tab.
  3. Click the zoom arrow next to the applicable employee.
  4. Click the Payroll Details tab then click Standard Pay.
  5. Enter the salary sacrifice amount as a negative value. As shown in the example below for Mary Jones, this is -$400.
  6. Click OK.
  7. Repeat steps 3 - 6 for all employees requiring a salary sacrifice superannuation deduction. In our example, this would mean repeating the steps to specify -$300 for Alan Long. 

 

The employee's pay

After setting this up, when a pay is processed for the employee you'll notice the Salary Sacrifice amount automatically appears as a deduction.

If the amount of the deduction needs to vary each pay, you can change the value on the pay when you process your payroll. Remember to enter the value as a negative.

Because superannuation salary sacrifice amounts are not generally subject to PAYG withholding tax, the software will automatically adjust the amount of PAYG tax withheld so that the salary sacrificed amount is exempt from PAYG withholding tax. This will reduce the amount of PAYG tax withheld from the employee's pay.

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titleSalary sacrifice payments and payment summaries

Because salary sacrifice payments are negative values, selecting the Salary Sacrifice category as part of an employee's Gross Payments (at the Payment Summary Fields section of the Payment Summary Assistant) will reduce the Gross Payments by the salary sacrifice amount.

Salary sacrifice superannuation payments are typically also considered Reportable Employer Superannuation Contributions, so may need to be accounted for as such in the Payment Summary Assistant.

For your specific circumstances, you should always seek clarification from the Australian Tax Office (ATO) or your accountant about how to handle salary sacrifice payments on your payment summaries.

Prepare payment summaries contains more information on using the Payment Summary Assistant. 

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<h2><i class="fa fa-comments"></i>&nbsp;&nbsp;FAQs</h2><br>
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titleWhat if I don't want to calculate the Superannuation Guarantee on the salary sacrifice superannuation portion of the employee's salary?

In this case the Superannuation Guarantee (expense) payroll category will need to be modified by using the Exclusions field. For example, Mary Jones' employer does not want to calculate the superannuation guarantee on the $400 that is salary sacrificed each month.

  1. Go to the Payroll command centre and click Payroll Categories.
  2. Select the Superannuation tab.
  3. Click New.
  4. In the Superannuation Name field, type 'Super Guarantee Excl. Sal Sac' or similar. You may also want to incorporate the employee's name.
  5. At the Linked Expense Account field select Superannuation Expense, and at the Linked Payable Account field select Superannuation Payable.
  6. Select the Contribution Type as 'Superannuation Guarantee (expense)'.
  7. Set the Calculation Basis to 'Equals 9.50% Percent of Gross Wages'.
  8. Type $400 in the field for 'Exclusions: Exclude the first $x.xx of eligible wages from calculations'. Note: This exclusion field requires a per pay period figure to be entered. In earlier software versions, this field requires a monthly figure. If this is the case and the superannuation category is being created for employees who are paid weekly or fortnightly etc., you will need to manually calculate the monthly equivalent salary sacrifice superannuation amount for this field.
  9. Set the Limit to 'No Limit' if there is no upper limit to the amount of superannuation payable under this category, or specify a limit accordingly.
  10. Set the Threshold to the appropriate amount of minimum monthly wages before superannuation calculates under this category. Currently this is $450. The Superannuation Information window will appear similar to the example shown below.
  11. Click Employee and select the relevant employee that you want to apply the Superannuation Guarantee category to. Note: Any employees that are selected here should be deselected from any other Superannuation Guarantee expense type that no longer applies such as the standard Super Guarantee expense of 9.5% of Gross Wages.
  12. Click OK to return to the Superannuation Information window.
  13. If required, click Exempt and select any wage categories that you do not want superannuation to be calculated on.
  14. Click OK to return to the Superannuation Information window, then click OK again.

The Superannuation Guarantee will now only calculate on the Base Salary net of salary sacrifice superannuation.

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titleRelated topics
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Salary sacrifice superannuation (fixed %)

Additional superannuation contributions

Checking and adjusting superannuation calculations

Multiple superannuation funds for employees

Reportable Employer Super Contributions

Superannuation reporting