Where to allocate Super Salary Sacrifice in the P&L?
I have some employee's that salary sacrifice to their superannuation. This amount is currently set up to go in the expense line item 'Salary and Wages' and not 'Superannuation'. Then I have just discovered that the external accountant moves it to the Super exp at the end of the year.
I would assume it makes more sense to have it in the S&W expense line, or a separate line altogether.
Can I please ask how other people show the expense in their P&L.
To give an example. Assume an employee earns $1,000 Gross income. They sacrifice $200 of this to Super. Therefore, ignoring tax, they will be paid $800 into their bank and $200 plus 11.5% super ($115) will be paid to their super fund.
In the P&L is it shown as either
a)
S&W Expense: $1,000
Super Expense: $115
or
b)
S&W Expense $800
Super Expense $315
What is the general consensus on this one please and thank you?
Answers
-
@Retreev Salary Sacrifice is NOT an expense to the employer as the employee is simply re-directing a portion of their Gross Wages (which are already being expensed!)
SS should be posting to a liability account π
Using your example above (& again, ignoring tax):
S&W Expense: $1,000 DR
Super Expense: $ 115 DR
Super Liability: $ 115 CR
SS Liability: $ 200 CR
Net Paycheque: $ 800 DR (before PAYG deduction)
Shaz Hughes Dip(Fin) ACQ NSW, MICB
*** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***
* Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *
Accounted 4 Bookkeeping Services
Ballajura, WA
(NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
0 -
@Acctd4, thank you for the reply. I understand that it isn't an expense to the employer, but it still needs to be shown in the P&L.
As a journal entry for the example I used, would it be:
DR S&W Exp $1,000
DR Super Exp $115
CR Bank $800
CR Super Payable (Liab) $315
Or is it:
DR S&W Exp $800
DR Super Exp $315
CR Bank $800
CR Super Payable (Liab) $315
Overall, we need to show a total expense of the Gross Wages plus Super in the P&L, which totals $1,115.
Hopefully that makes it a little clearer as to what I am trying to figure out! π
0 -
"β¦ I understand that it isn't an expense to the employer, but it still needs to be shown in the P&L ..."
And it already is β¦ within the S&W expense (in the same way that PAYG Tax is also already included in that gross figure, as an "expense")
Your first example example here:
DR S&W Exp $1,000
DR Super Exp $115
CR Bank $800
CR Super Payable (Liab) $315
β¦ correctly reflects this (which is the same as the example I provided, I just showed the SS ($200) & SG ($115) liability amounts as 2 separate lines, as I prefer to have separate liability subaccounts for SG v SS π)
Shaz Hughes Dip(Fin) ACQ NSW, MICB
*** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***
* Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *
Accounted 4 Bookkeeping Services
Ballajura, WA
(NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
0 -
Thank you again for your reply. Your first reply didn't show the detail of where you would allocate the amounts to for some reason, which is why I clarified with my reply! Weird! π€·ββοΈ
But thank you, I will make sure I speak to the external accountant as to why he is reallocating the salary sacrifice amount to Super Exp rather than leave it in S&W (which is where I think it should remain).
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