Where to allocate Super Salary Sacrifice in the P&L?

Question

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?

Retreev · Answer

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! 🤷‍♀️

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).

Acctd4 · Answer

"… 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 … 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

… 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 😊)

Retreev · Answer

@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! 😊