SGA on Gross Income not Taxable income

Maureen Hallen

How do you ensure SGA is calculated on Gross income & not taxable income when an employee salary sacrifices super. Currently using Reckon Hosted 2021 R2

Acctd4

A little confused by your question ... I think you're meaning calculated on gross, rather than net ?

In the Super Payroll Item configuration (eg when you double-click on it in the List), in the Taxes window ensure PAYG Tax is UNTICKED.

Maureen Hallen

Hello Shaz,

I'm meaning that when an employee salary sacrifices their taxable income is less than their Gross income, currently our Reckon Hosted is calculating the SGA on the Taxable Income.

i.e. Gross $2000

Salary Sacrifice $100

Taxable $1900

SGA is showing as $190

Should be $200

In the Super Payroll Item configuration (eg when you double-click on it in the List), in the Taxes window ensure any taxes are UNTICKED. State Payroll Tax is currently ticked,

Kris_Williams

try This, I think this is the box Shaz is referring to - untick Taxes

FYI, the term you use Taxable income, is better referred to as Net Income

Maureen Hallen

SG is being calculated on the taxable pay highlighted below.

Total pay or Gross is $2884.62

Net Pay is less Tax

Maureen Hallen

AS you can see the SGA is 10% of the Taxable income

Kris_Williams

Yes I understand your question- have you changed the salary sacrifice item so it’s not attracting tax?

is it Reckon Hosted you are using?

Acctd4

(I never use the custom Payslip template so - whilst technically incorrect - I'd forgotten this was the term used on there)

Have you unticked PAYG Tax in your Super SGA-Sunsuper Payroll Item?

Maureen Hallen

Yes this has been unticked.

Kris_Williams

Was it already unticked or have you just changed it? If you just did it try processing the pay again and see if anything has changed

And getting back to Shaz’s original suggested has your SGA item also got tax unticked

Maureen Hallen

was already unticked

Kris_Williams

What about this window - just guessing now

Acctd4

Hmm ... difficult to determine without seeing it ...

Is it definitely set up as a Super Payroll Item - Super Contribution (Company & Employee Contribution) ?

Maureen Hallen

Thanks for trying to provide assistance, discovered it was only one fund that was affected and have set up a new Super payroll item & tested with a test pay transaction, now calculates correctly.

Acctd4

Glad you got it sorted ☺️

It sounds like it was definitely a configuration setting in that initial one that wasn’t quite right but unfortunately some of the options can only be set at initial creation which means you can’t always check those specific settings down the track 😬