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Stumped about reporting super for STP with Payroll app

aakk

Hi,

Small business owner (IT), my company will be paying me the cap amount of $27500 in super this FY in 4 quarterly payments. Salary will be paid monthly based on earnings in that month.

For example, in the month that I'm paying the $6875 quarterly super, I may have also paid a salary of $15000. I can't seem to break down the super amount into super guarantee and employer additional contribution amounts in the Payroll app (basic).

I have not understood the other posts relating to this about how I should report this, and about making adjustments at the end of the year.

Could someone please explain (really, really) simply how I should be reporting the super for the above situation?

Thank you for any help.

Accepted answers

Rav

Hi @aakk

Can you go into Earning & Leave Items in the settings menu and confirm if your Ordinary pay item has the 'include in super guarantee calculation' option ticked. (screenshot example below)

All comments

swakhlu01 .

@aakk As a small business owner you may have to be aware of the STP reporting requirements for closely held employees.

When you get paid into your bank account or super fund and when you report are two independent activities. However, it is important any payments should not be made until the STP Payrun event has been created. Ideally you could only run Quarlterly Payruns to report both the salary earnings and the reportable super components. However, I don't believe the basic Reckon Payroll app has been updated to allow Quarterly payruns yet.

You will have to stick to a monthly payrun frequency. There is no direct way to enter Reportable Employer Additional Superannuation Contribution (RESC) in Payroll App at this stage. There are other Reckon products that let you do this.

Your best option is to estimate a monthly earnings amount and adjust the Superannuation rate to a figure greater than 10% (SGC Rate). Keep in mind the super concessional cap of $27500 also includes the SGC amount based on the earnings that month. The STP reporting will show the 10% of the earnings as SGC and the remaining (above 10%) as RESC in the ATO employee Income statement (MyGov).

Towards end of the FY you will have to adjust the rate based on actual earnings so that you are within the ATO guidelines for closely held employee STP reporting. As mentioned your only option of reporting RESC using Payroll App basic is to play with the SG Rate to get the right amount. I would suggest using an Excel spreadsheet to do the calculations and income projections and then add the figures into the Payroll app.

If unclear you should consult a tax consultant on your STP reporting obligations.

aakk

Hi @swakhlu01 . ,

Thank you very much for your reply, that's very helpful. I will also contact my accountant but wanted to speak to an expert at Reckon first.

I have tried what you suggested and could use some more advice, please.

AIM: Report earnings of $20000 and super of $6875 for November.

I create a pay run for the month
I add an "Earnings" item of Ordinary, 1 hour x $20000 per hour
I edit the "Super guarantee" rate to 34.375%

At this point, I have a "Draft" pay run. The "Earnings" are $20000 but "Super guarantee" is still $0.00.

I was expecting the super amount to be calculated and displayed at this point. I noticed the message under it saying "Calculated when $450 monthly threshold is reached".

Should a calculated super amount of $6875 be displayed at this point? Have I done something wrong?

Thank you again.

swakhlu01 .

@aakk Perhaps you may have to check if the Earnings figure are correct. I tried a sample payrun with the figures you provided and assumed a payrun period was one month. The super calculation seems as expected.

aakk

Thanks @swakhlu01 . . From what I can tell I've done the same as you with the earnings and super rate.

Are there any particular settings I should check in my employee record or company record?

Thank you again for your help.

Rav

Hi @aakk

Can you go into Earning & Leave Items in the settings menu and confirm if your Ordinary pay item has the 'include in super guarantee calculation' option ticked. (screenshot example below)

aakk

Thank you very much @swakhlu01 . ! That has fixed the issue.

swakhlu01 .

@aakk I gather from your last post the calculations for the super are as expected now. Though I am not sure how this was fixed.

Rav

https://community.reckon.com/discussion/comment/20626762#Comment_20626762

I believe this was the solution @swakhlu01 . 🙂

aakk

Sorry @Rav , I didn't notice that it was you that gave the steps that allowed me to get the SG calculated, my apologies!

swakhlu01 .

https://community.reckon.com/discussion/comment/20626768#Comment_20626768

I am confused! 🤨 How did the $450 per month earnings limit message dissappear. Your screen shot shows the Super calculation as $0.

aakk

Hi @swakhlu01 . , I think the confusion has arisen because I marked @Rav 's answer as having answered the question, which moved it to the top of the thread. But really, it was that answer plus your initial answers that closed the gap for me.

You posted a screenshot with the correct behaviour, I posted a reply with screenshots showing my incorrect behaviour, Rav posted that I should check a setting in the app, I checked it and changed it, and now the SG calculation is working.

I think with the old STP app we were able to enter any super amount in a pay run if that setting was unchecked. But with the Payroll app, it looks like you can't enter an ad hoc super amount when the setting is unchecked, it just leaves the super amount as 0. It would be better if we could enter an ad hoc super amount, as there may be a month (eg June) where the paid super (to meet the cap) is more than the earnings paid in that month.

But again, thank you both for your help.

swakhlu01 .

@aakk Ah! now I get it. Had missed the top part of the post. Glad to know you are able to see the correct amounts.

As I mentioned very early in this post you will have to check with a Tax Accountant about the setup of super payment and STP reporting for closely held payees. Also with STP2 the detail of payroll reporting to ATO is changing. My understanding is the features in Payroll App are being enhanced to meet those requirements as well. Perhaps the old STP app was more basic and suited the initial STP reporting rules at that time. In any case the STP app did not report RESC. Entire super amount was treated as SGC.

Hope this helps.