STP & RFBT issue

Cathy_9742507

Hi
Our staff are able to Salary Sacrifice (we are Non Profit Public Benevolent Institution).
Each pay the Salary Sacrifice amount is deducted from the Gross Wages before PAYG is deducted.
When I lodge PAYG via OSFA each month, I need to adjust the Gross amount as it is reading the Total Gross via STP lodgements and not the Taxable Gross.
I have spoken to Reckon support and I have set up the Salary Sacrifice correctly using STP 'O'.
Each 31/3 I use Set Up YTD amounts to enter Grossed Up FBT in RFBT.
I have been approached by an employees accountant who informs me a staff members Income Statement is showing the Total Gross in his Income Statement and therefore the staff member has a sizeable Tax Debt.

Can anyone help me sort this issue?

CB

Acctd4

Hi @Cathy_9742507

It sounds like an issue with your SS setup.

It needs to be created as a Super Contribution (Company & Employee Contribution) Payroll Item Type (Note: this first window is ONLY visible upon initial setup!)

It should be set to Salary Sacrifice (SS) Super Contribution:

It should then be linked to Salary Sacrifice Super (S) for the Tax tracking type:

It also MUST have PAYG Tax TICKED (NOTE: This window doesn't mean it will be taxed, it means tax is affected by this Payroll Item eg in this case, reduced!) :

I also wouldn't be using the Setup YTD Amounts .. section for annual RFB. Instead, just open & unlock the last Paycheque dated on or before 31/03 each year & add the RFB Payroll Item & amount on there.

Cathy_9742507

Hi Shaz

I appreciate you looking at my issue but the Salary Sacrifice is NOT Super but rather Other Employee Benefits and Reckon have assured me that the Payroll Item is set up correctly under STP 'O'.

The issue is that the employees Income Statement is incorrect in that the Income is Total Gross rather than Taxable Gross (after Salary Sacrifice).

I spent time yesterday talking to ATO and they suggest it is a Payroll software issue.

Thanks

Cathy

Acctd4

Hi Cathy

OK … I just assumed it was Super.

I'm still not convinced it's a software issue though, as I've set up non-Super SS for clients & it reports fine when set up this way:

It needs to be created as a Deduction-type (or negative Addition if you're not on-paying it for the employee) - & yes, it should be mapped to Tax Tracking Type Salary Sacrifice Other Employee Benefits (O) - but you still need to ensure that PAYG Tax is TICKED.

Cathy_9742507

Hi Shaz

I set up the Salary Sacrifice years ago (before STP) as a Deduction and the correct information has always flowed to the Income Statement.

In this example the entire Gross wage is Salary Sacrificed.

Prior to this year (for the past 4 years), the Salary & Wages - Total Gross Amount on the Income Statement for this employee was zero with a Reportable Fringe Benefits amount (representing the Grossed up Salary Sacrifice amount).

This years Income Statement shows Salary & Wages - Total Gross Amount as (the total YTD Gross Wage) as well as a Reportable Fringe Benefits amount (representing the Grossed up Salary Sacrifice amount).

This is resulting in a Tax Debt for employees - which is not correct.

This is the issue I am looking to clarify.

Thanks

Cathy

Acctd4

Hi Cathy

I see you have 2 set up there (a positive & negative) & I believe that's where the issue will lie - It's due to the mapping differences between original STP v STP2 disaggregation.

I have a document I've setup on how to create a non-Super SS - Happy to send it through if you want to shoot me an email direct.