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Salary Sacrifice and QE

AnneKennedy

Hi, I understand Salary Sacrifice to super is included in QE. I am trying to tag it as such by clicking on the item in my payroll item list. I do not have a tick box for QE on an inclusions page of the Sal Sac item. How would I therefore do this? Super is calculated on the gross pay before the Sal Sac deduction so does it not have to be tagged? Thanks

Comments

Rav

Good question @AnneKennedy

This one is definitely a bit confusing based on the ATO wording, so you’re not alone 🙂

I'll try my best to add some context and explain it:

The Salary sacrifice to super item doesn’t need to be tagged as Qualifying Earnings (QE) itself.

Instead, Reckon Accounts looks at what the earnings would have been before the sacrifice.

For example:

If an employee earns $10,000 (which is QE-eligible income), that full $10,000 counts as QE
If $2,000 of that is salary sacrificed to super, the QE still remains $10,000
The salary sacrifice amount is not added on top, and it’s not deducted from QE

Why you don’t see a QE tick box

Salary sacrifice super items can’t be marked as QE and that’s expected. Instead, Reckon Accounts Hosted already handles this correctly in the background based on the pay item’s tax tracking type.

A simple way to think about it is, QE is based on the employee’s original earnings before salary sacrifice

So there’s nothing extra you need to configure as it’s already working as intended.

Let me know if you have any questions.

AnneKennedy

Thanks, question answered.

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