Is Super included in my Salary

Idrees

I am confuse. I do salary sacrifice for Super Contribution. Does this super amount go to my gross salary in STP? Does the mandatory super also go to my salary in STP?

I am confuse as none of the super amount has to be reflected when I do my IAS (Income Activity Statement) in ATO Business Portal.

Rav

Hi @Idrees

When you create a pay run in the Payroll App there is a specific field designated for salary sacrifice which you use to enter how much of the earnings you wish to sacrifice. Any salary sacrifice amount entered is recorded as Reportable employer super contributions (RESC).

Super Guarantee will also be shown separately and is calculated as a % of the earnings with the default rate in the 2022/23 financial year at 10.5%. The super rate can be customised within the pay run by tapping on the Super Guarantee field and adding whatever % rate you wish to calculate for super.

Idrees

Hi Rav, sorry, if I didn't explain my issue well. I can illustrate with following example:

My Salary = $10,000 per month (excluding Super)

Super Guarantee = $1,050 per month

Salary Sacrifice = $500 per month

What should I enter my monthly Earning as in Reckon STP.

If I entered $11,050 (Salary + Super Guarantee) the software starts calculating further super of 10.5% on top of it and additional tax.

If I entered $10,000, the software calculates incorrect net salary after deducting Super and tax.

Do I need to worry about the net salary amount as its not reported through your software?

Rav

Taking your example, I've created a pay run in my account as below for a full time employee, monthly pay frequency, No TFT tax scale.

swakhlu01 .

@Idrees it might be best to discuss this topic of salary sacrifice of superannuation and the way it might apply to your circumstance with your tax accountant .

The Reckon Payroll app is doing the right calculations as per the ATO rules involving payment of salary sacrifice super arrangements to be reported in STP.

If your intention is to pay more than the regulatory 10.5% compulsory superannuation to your employee then there are other ways of structuring this in the Payroll app so that it is reported correctly as RESC (reportable employer superannuation contribution) as part of STP. Salary sacrifice arrangements may not be the only method.

This is my opinion as a user of the app.

Idrees

I am clear on my super and salary sacrifice structure. All I am trying to understand is what components your software expects to include in monthly earning. Is it:

1. $10,000

2. $11,050 (salary + super)

3. $10,500 (salary + salary sacrifice)

4. $11,550 (salary+super+ salary sacrifice).

If you can answer the above then I'll know my answer why there is a difference in my and software calculations. Many thanks.

Eric Murphy

Why would it be anything other than just the earnings...?

You're overcomplicating this for no valid reason.

Idrees

Eric، I guarantee you that a simple and less complicated answer will solve the issue.

If it's only the earnings (and no super or salary sacrifice) then your software calculations for tax and net salary are in correct.

On a $10,000 earning the the calculated tax comes out to be $2,655.58 (inclusive of 2% medical levy). The net salary this calculated is $7,344.42. This has no impact of super guarantee or salary sacrifice.

I hope you understand the issue here rather than getting iffy on me. I am sure I am as busy as you and not playing games here. I thought you would be appreciated for me on picking this error.

Idrees

Eric, my apology. I thought you are an administrator.

The software seems to be deducting tax including the salary sacrifice portion. I found a way around but that's not how the user should be doing it.

Idrees

I hope the admin or App expert clarifies my concern.

swakhlu01 .

@Idrees Based on what you want to achieve, you need to use-

$10,500 in the Total Earnings (salary package amount), $500 in Salary Sacrifice super and 10.5% in super guarantee.

The system will do the rest. As per ATO rules effective Jan 2021, the super guarantee calculation applies to the full salary package amount not just the base salary. Refer the example below as confirmation of how the Payroll app calculates net pay and tax. This is consistent with your expectations. The STP will report $1102.50 as compulsory super and $500 as RESC.

Idrees

Thanks swakhlu01. Answers my issue.