Adjusting 2020-21 super contributions
Hi, I am new to this and perhaps am asking for guidance on a matter that has been already discussed.
I used the STP App (free) in 2020-21. I migrated to the new Payroll App on 01JUL21.
Super Guaranty Contributions made quarterly in FY 2020-21 were at 10%.
I now realise that I should have listed the SCG (compulsory) at 9.5% of wages and the other 0.05% should have been listed separately as Reportable Employer Super Contributions.
What are the steps needed to fix this situation in the App.
For FY 2021 I accidentally put more than 9.5% super in an employee’s pay run submitted from the old STP App, it turned out the amount over the 9.5% was allocated to RESC in employee’s myGov income statement.0
Lucky you. In my case the employee's myGov income statement shows all the super payments paid by the employer as "Super Guaranty Contributions liability" and nothing allocated to RESC. That is what I want to change ie reallocate 0.5% from the total of Super Guaranty Contributions liability to RESC.0
Employee data would have been migrated to Payroll App. Submit FY 2021 EOFY report again for employee from Payroll App might do the trick.0
@Antipodean01 The old STP app did not use Super Guarantee rates but abosolute amounts. So it is unlikley it would have worked out how much is RESC. I am not sure from your description whether you have already run the 2020-21 EOFY Payrun from the new Payroll App after migration. In order to get the 2020-21 FY RESC reported correctly, you could try altering the 2020-21 Initial YTD summary in Payroll app for the employee to split the Superannuation amounts between Compulsory and Salary sacrifice fields. Check the EOFY summary Payrun for the correct split and send to ATO if it looks ok. That should report the right allocations between Compulsory and RESC in employee ATO income statement.
Though I am unsure if you are able to run the EOFY report from the new Payroll app if all the Payruns for 2020-21 were done from old STP. See how you go.0
Thank you both for your advice.
- I ran EOFY 2020-21 in STP App before migrating to the new Payroll App.
- I took swakhlu01's suggestion of trying to edit the EOFY 2020-21 report in the Payroll App
- I found a problem. While I can change the SGC amount to reflect 9.5% and not 10% as was paid, I am not offered the opportunity to list the 0.5% as RESC. I am only offered one other category besides the SGC: "Salary Sacrifice for Super".
- Would it be correct to list the RESC amount under "Salary Sacrifice for Super", when the 10% was used more for the purpose of administrative simplicity than salary sacrifice per se?
@Antipodean01 Keep in mind you are trying to override the behaviour of Payroll app to suit your special one-off requirement for which it is not designed. In a normal Payrun the Salary Sacrifice superannuation has a different purpose compared to the way you want to report the Additional Superannuation.
Per item 2 in your comment I had suggested updating Initial YTD Payment Summary of Employee - not the EOFY 2020-21 report. I am not sure if you can amend this if it was done from STP app.
However, in this case if you record the amount representing the 0.5% in the Salary Sacrifice Super part of the Initial YTD Summary that should get reported as part of RESC in the employee Tax Statement provided you are able to create a new EOFY 2020-21 Payrun in Payroll app. I am not sure if this is possible if you have not created any 2020-21 payruns from Payroll App.
There might be a solution for this but one step at a time. I am assuming you have already taken a copy of the Employee Tax Statement from the ATO MyGov just for record before you change anything. This must already be in Tax Ready state.1
Thank you again swakhlu01.
I had suggested updating Initial YTD Payment Summary of Employee - not the EOFY 2020-21
(1) My post was incorrect.
In Payroll App I DID see that I can update the (STP App processed) Initial YTD Summary and that allows me to include contributions above 9.5%, but only as "salary sacrifice"
(2) As to your comment on Employee Tax Statement, I can see the following:
EMPLOYER REPORTED CONTRIBUTIONS
Employer Super Contributions liability (this shows the 10% paid)
Community Development Employment Projects $0
Reported Employer Super Contributions. $0
Reported Fringe Benefits $0
(3) You wrote
However, in this case if you record the amount representing the 0.5% in the Salary Sacrifice Super part of the Initial YTD Summary that should get reported as part of RESC in the employee Tax Statement provided you are able to create a new EOFY 2020-21 Payrun in Payroll app. I am not sure if this is possible if you have not created any 2020-21 payruns from Payroll App
(3) After updating the 2020-21 details for Initial YTD I NOW see
Superannuation (YTD) (amount listed = 9.5% )
Salary sacrifice for super (amount listed = 0.5%)
I saved that.
(4) When I click on PAY RUNS, and click on EOFY, I see
NO EOFY SUBMISSIONS - EOFY submissions will show up here here as they have been filed.
As you forecasted, I cannot access STP generated EOFY reports.
Any suggestions on how to work around this?0
@Antipodean01 How about submit a $0 pay run from the Payroll App for FY 2021?
I think you should just leave it as is. Tell employee to declare correct RESC amount in Tax Return 2021.0
@Antipodean01 I agree with Joseph Li to leave things as is considering it is already Sept and the 2020-21 Tax statement for employee is in Ready state.
The $0 payrun for 30June21 should work and enable you to send another 2020-21 EOFY Payrun with RESC as required. But unsure what the ATO's position is going to be. Try calling ATO Business support to confirm if this is necessary. They are good and supportive and understand the issues STP is causing.0
Thanks to both of you.
- Regarding the $0 pay run you both suggest, what period should it be for? Note I first used the Payroll App in July 2021.
- I forgot to mention that the employee has lodged his tax return already and it was processed.
- Are you suggesting he amend his return to include the RESC?
- I just saw that I can still use the STP app until 30/09/21. The EOFY report shows the 10% paid in super and as noted earlier, does not separate the SGC from the RESC. Can I use the STP app to make the adjustment and if so how?
Please don't go back to old STP app as you have already migrated data to Payroll App.
If employee ATO tax return has been processed, best to speak to a Tax accountant about obligations re RESC for 2020-21.
It might be more appropriate to lodge a 2020-21 manual Employer declaration for RESC and give a copy to emloyee for reference.
In case you were to use the 2020-21 EOFY report from Payroll App, the $0 payrun to trigger the EOFY report could be for any period in 2020-21 as long as the payrun date is prior to 30 June 2021.0
@Antipodean01 There is nothing more to do if employee has already lodged Tax Return 2021. RESC does not affect taxable income, it only affects entitlement to some benefits. It is more than likely RESC makes no difference to employee’s tax position in this case.0
Good info. Thanks.
- I will keep away from STP app, as you suggest.
- One more thing please.
I just opened up the Payroll App and accessed 2020-21 data.
I saw that what I did earlier i.e separate SGC from RESC for 2020-21 via Initial YTD (to 30/06/21) was saved for 2020-21.
The correct amounts are listed in each field (ie RESC = salary sacrifice in this case).
Before I speak to the accountant as you suggest, given the correct amounts have been saved for 2020-21 in the Payroll app
how can I transmit that to the ATO? Or is that for the accountant to address?
@Antipodean01 If you submit 2021 EOFY from Payroll App now, ATO would know employee’s income statement has changed after tax return was processed. Therefore employee would have to lodge amendment to tax return.0
Thanks again. Much appreciated. I am now ready for correct classifications when paying the Sept Qtr super contributions.0
I thought I would share with you the success I had following your instructions. I spent the weekend on this matter because it was not as straight forward as I first thought.
I followed your instructions upto and including separating the total super paid into SGC and Salary Sacrifice by adjusting my earlier entries through INITIAL YTD. Salary Sacrifice is the only alternative to the SGC with RESC not being an option in the app.
I then went to PAYRUNS, which listed the payruns prepared via the PAYROLL App and also listed "previous pay runs" being via the STP App.
I chose June 2021.
I then clicked the "+" button on the top right of the screen. I then saw a choice of options, and settled on END of FY and subsequently chose 20/21.
The SGC amount, correct for 9.5% now appeared. I saved it.
That was all I could see and do.
I then backtracked to confirm that the 0.5% of the 20/21 payment was still recorded as "salary sacrifice" and it was.
I returned to the END of FY screen showing the 9.5% was the amount listed in super for 20/21 and saved it again. Suddenly I saw a tab at the foot of the screen asking if I want to declare to the ATO. Which of course I did. And that was great.
Thanks again to both of you. I hope what I added above makes sense to you and to others who may be in my boat.0
@Antipodean01 It is great to know the workaround steps to achieve your objective of recording the 2020-21 RESC reporting for employee from STP app to Payroll app was successful.
Your precise desciption of the problem and steps you took following the instructions from Reckon community page was useful in steering the outcome for you.
Hope your employee has checked the 2020-21 Tax statement in ATO Mygov to confirm the items are reported correctly. In addition you will need to make sure Tax Statement is in Tax Ready state. Though I am unclear how this works if the Employee Tax return has already progressed as you had pointed out.
Need to be mindful the Salary sacrifice superannuation reporting in regular Payrun setup works differently compared to the EOFY Payrun. If you are paying additional superannuation to employee (above the 10% compulsory super) then Salary sacrifice is not the way to report it. This is because Salary sacrifice superannuation is a Salary packaging feature. If you want to use Payroll app to regularly report additional superannuation that needs to show up in RESC, then simply adjust the Guaranteed super rate to above 10% by the equivalent amount based on Earnings recorded. The Payroll app will report 10% amount as Compulsory Super and remaining as RESC when you send the Payrun to ATO.1
@Antipodean01 Congrats on your perseverance. One question though, did you use the $0 pay run? You did not mention it.0
Thanks again for you detailed reply.
"Hope your employee has checked the 2020-21 Tax statement in ATO Mygov to confirm the items are reported correctly. In addition you will need to make sure Tax Statement is in Tax Ready state".
I am THRILLED to say that YES: myGov confirms my changes AND Tax Stmt is in Tax Ready state.
Also, myGov shows the extra pmt as RESC! How about that!
Finally, as mentioned the boss pays 10% for admin convenience, we shall not have similar problems in 2021-22 as again a straight 10% will be paid which happens to be the legislated SGC for this FY.
Many thanks again.0
Good evening Joseph,
Thanks for the valuable feedback.
"Congrats on your perseverance. One question though, did you use the $0 pay run? You did not mention it".
I certainly planned to use it after I returned to the END of FY screen after backtracking to confirm that the 0.5% of the 20/21 payment was still recorded as "salary sacrifice" and it was.
It was on that (END of FY) screen when I again saved the dollar value for 9.5% that out of nowhere I saw a tab at the foot of the screen asking if I want to declare to the ATO. Which of course I did.
If that declaration had not appeared, then for sure I would go back and use the $0 pay run.0
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