ANSWER ID:9154

The payroll module in AccountRight can be setup to automatically calculate Superannuation for the building industry.

The building industry award generally indicates that superannuation is payable as a flat amount or 9.5% of gross wages, whichever is greater.

This support note explains how to setup your superannuation pay category to achieve this.

Note: As an example in this support note we are assuming that an employee is paid fortnightly and the minimum superannuation required for this frequency is $95.00. For more information on the minimum amount of superannuation required, you should consult with the relevant industry award or go to the Australian Taxation Office (ATO) website.

Here's what we'll cover:

1. Create a new superannuation category to generate the minimum superannuation payment
2. Create a superannuation category for superannuation where superannuation is greater than the flat rate
3. Calculating the exclusion
4. Record the pay

Task 1 - Create a new superannuation category to generate the minimum superannuation payment

1. Go to the Payroll command centre and click Payroll Categories.
2. Click the Superannuation tab and then click New.
3. Enter the Name of the Category. In this example we have chosen Building Award Super Flat $.
4. Select the Contribution Type as Superannuation Guarantee (expense).
5. Enter the Calculation Basis as $95.00 Dollars per Pay Period. In this example the employee is paid fortnightly and entitled to $95 minimum superannuation. The pay frequency for the employee is set up in the employee's card file.
6. Set the Limit to No Limit.
7. There is no Minimum Wage Threshold for this category so it should remain $0.00. See our example Superannuation Information window below.
8. Click Employee and select the employees to receive this category.
9. Click OK.

Task 2 - Create a superannuation category for superannuation where superannuation is greater than the flat rate

1. Go to the Payroll command centre and click Payroll Categories.
2. Click the Superannuation tab and then click New.
3. Enter the Name of the Category. In this example we have chosen Building Award Super or Greater.
4. Select the Contribution Type as Superannuation Guarantee (expense).
5. Enter the Calculation Basis as 9.50% Percent of Gross Wages.
6. Enter the Exclusions. Exclude the first $1000.00 of eligible wages from calculations. For information on calculating the exclusion amount, please refer to Calculating the exclusion below. In summary, the following formula is used: Minimum Superannuation required by the award=$XX.XX $XX.XX divided by 0.095=$ Exclusion value
7. Set the Limit to No Limit.
8. There is no Minimum Wage Threshold for this category so it should remain $0.00. See our example below.
    

9. Click Employee and select the employees to receive this category.

10. Click Exempt and select all wage categories that are not required to accrue superannuation. This will be as specified by the award.

11. Click OK.

Calculating the exclusion

You can calculate the exclusion amount by using this formula:

Minimum Superannuation required by the award=$XX.XX

$XX.XX divided by 0.095=$ Exclusion value

Applying this formula to this example:

Minimum Superannuation required by the award=$95.00

$95.00 divided by 0.095=$1000.00

This is the gross wages that are to be excluded each pay.

9.50% of $1000.00 is $95.00. You have already paid $95.00 superannuation as the flat rate. You do not have to pay it again so you exclude it from further required superannuation calculations. You will insert $1000.00 as the excluded wage amount because superannuation will have already been calculated as part of the flat rate category.

Task 3 - Record the pay

When you pay an employee, the correct amount of superannuation stipulated by the award will be calculated automatically:

• If 9.5% of the gross wages is less than $95.00, then $95.00 of superannuation will be added to the employee's pay. This is shown in Example 1.
• If 9.5% of the gross wages is greater than $95.00, then 9.5% of the gross wage will be calculated as superannuation. This is shown in Example 2.

Example 1

Pay where 9.5% of gross wages is less than the minimum for the award and the minimum is still added to the pay.

As you can see, the employee has earned $975 gross wages on this pay. This would normally equal $92.62 superannuation. As a result of the award, they are being given a flat rate of $95.00.

Example 2

Pay where 9.5% of gross wages is more than the award minimum. 9.5% of the gross wages is added to the pay as superannuation.

You can see that gross wages are $1200. The Building Award Super Flat $ is always being used to generate superannuation on each pay, in this example $95.00. When the gross wages being paid exceed the flat rate of superannuation (equivalent to 9.5%), the Building Award Super or Greater category is being activated and it is generating the additional super calculation that is required. In this example, an additional $19.00 is calculated.

The software has calculated the required values for superannuation.

9.5% of $1200=$114.00.

This is the required amount of superannuation on the pay.

$95.00 + $19.00=$114.00.

This is the calculated amount of superannuation on the pay.

Other superannuation support notes

Checking and adjusting superannuation calculations

Salary sacrifice superannuation (fixed $ amount)

Salary sacrifice superannuation (fixed %)

Multiple superannuation funds for employees

Reportable Employer Super Contributions

Printing the Superannuation Choice Form

Super Guarantee guidelines

Superannuation rate changes from 1 July 2014

Reporting super on payslips