Salary Sacrifice Super in STP App

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We have only 1 employee hence use the STP app on my mobile. I can't see how I can add salary sacrifice super payments so that they will show up as reportable super amount in the EOY summary. Is it possible?

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Ray

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Posted 1 month ago

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I've been trying to figure this out for the last two weeks and also need to know how to do this ! 
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Platinum

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Hi Rav, looking forward to your guidance on this question. Thanks for being there.
According to Rav the App doesn't have this feature which is a huge flaw as it should to be ATO  compliant.
 
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Rav, Community Manager

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Hi Mark,
To provide a bit of context on this, the free STP app has been built with the ATO's no cost/low-cost STP solution requirements in mind and as such it covers the minimum requirements for micro-businesses to report Single Touch Payroll submissions. I'd link you to the page that the ATO previously had on this but it looks like its been removed so I can only link you this one instead.

To reiterate, the Reckon STP app is STP compliant as required by the ATO for micro-business purposes. In saying that, you need to choose a solution that is right for you and your business based on your own circumstances so if salary sacrifice is a requirement for you but not supported in the free app then I'd recommend taking a look at a low-cost payroll solution such as this instead - https://www.reckon.com/au/payroll-app/
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Platinum

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(I’m not a tax professional so please don’t regard my thoughts on this as definitive.)

Based on the above info and a bit more research, I’ve come to these conclusions.

On an employee payment summary, salary sacrifice super contributions have their own line item (“Reportable super contributions”).

It would be ideal if the STP app supported reporting that separately, but apparently the ATO’s own spec for free apps doesn’t include it! Hence Unfortunately the Reckon STP app (and probably other free apps for micro employers) does not have a way to report that figure.

An employer could possibly just add the salary sacrifice super amount to the 9.5% super guarantee amount and report the total in their eoy finalisation submission. However that then won’t show the sal sac amount separately on payment summary. Whereas the tax office deliberately wants that separate item called out, because for some of the Government’s income tests (e.g. Employee’s eligibility for broader govt things) the total Remuneration figure they use is salary/wages plus salary sacrifice.

Alternatively, could go through the heartache and headache of transitioning to a paid payroll solution with fuller features. And somehow transition the past year’s reporting across to that ... just to generate one extra figure in eoy reporting ... hmm I for one am not keen on that.

Keeping it simple, best workaround i can see is to submit what the App can submit, with just the 9.5% super, then (love this, after all the effort to move to electronic STP reporting) send a paper payment summary “amendment” to the ATO that shows the salary sacrifice super amount separately in the reportable super contributions item. There’s a checkbox on the paper form that says it’s an amendment. The ato website even has an instruction that encourages this I think.
https://www.ato.gov.au/Business/Super...

PS another gotcha to beware of: As of the 2019/20 tax year, The 9.5% super guarantee calculation is defined to be based on employee’s income calculated (as mentioned above) as wage/salary plus salary sacrifice amount. e.g. if paid 90k salary and sacrificed another 10k to super, the super guarantee amount is 9.5% of 100k.
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Platinum

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PS interested in any alternative thoughts or approaches
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GarethO

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I salary sacrificed in late June and had the same issues with the free app.  i got around by migrating to the paid app.  you get 3 free pay runs.  I did the pay run, then did the end of financial year report.  checked on the business portal and all ok.  then i went back to the free app and processed wages for July (no salary sacrifice). checked back on Business portal and all ok.  obviously this method will only work for 3 pay runs, but it will get you out of trouble for last year.  Best idea is to ditch Reckon for an app that has better functionality.  Reckon might say its compliant, but its quite deliberately designed this way so that you have to upgrade.
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Rav, Community Manager

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Platinum - An alternative path I'll outline is, the new Reckon Payroll App which as the name suggests has actual payroll features & functionality but more importantly, has the ability to migrate your info from the free app so it should be a relatively painless switch. Just an option though so I'll leave it there.
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renee

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GarethO I would love to know how you did this? I have tried and every time I go to submit there is an error
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GarethO

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Hi Renee, I saw that others were having the same issue and discovered a work around.  Salary Sacrifice will only work with the paid app, and in due course i will have to move away from Reckon or start paying - luckily i only salary sacrifice once per year.  I didnt encounter any errors so cant give any feedback on that. In relation to further advice you are best to consult experts like Rav as to why the paid app is bringing up errors.
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renee

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Thanks GarethO, So I was going to do exactly what you did, this would be my first pay run with the paid app but for some reason every time I enter salary sacrifice it won’t work. Also I have tried to contact Rav numerous times. Just wondering did you enter anything else in when you did that pay run or just the salary sacrifice?
(Edited)
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Ray

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I have tried to migrate to the paid app but keep getting a message that the ABN is already registered! Did anyone try submitting a paper amendment?
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Platinum

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Yes to submitting by paper. 

I have read thoroughly the ATO publication “Single Touch Payroll employer reporting guidelines”, last modified 27 Mar 2020, QC 54550.  Can read online or download a pdf copy.  https://www.ato.gov.au/Business/Single-Touch-Payroll/In-detail/Single-Touch-Payroll-employer-reporting-guidelines/ . Thanks to Joseph Li for the inspiration.

I now understand the very simple approach to be as follows.  In short, if an employer’s STP reporting software can’t report super salary sacrifice amounts (like us with the Reckon STP app), then the employer can send that “Reportable Employer Superannuation Contribution (RESC)” amount on an old-school paper payment summary to the ATO. The paper payment summary should only include amounts not reported through the STP app. Employee will effectively end up with 2 payment summaries, one generated electronically from the STP app (showing wages and salaries and 9.5% super), and the other submitted on paper showing the missing salary sacrifice super amount (RESC)

The ATO guidelines doc is 33 pages in pdf, but here are the key bits. 


Under “Voluntary reporting” (page 13) it says:

You can also choose to include reportable employer superannuation contributions (RESC) ...for your employees. If you choose to include these amounts in a report by 14 July in the next financial year and complete a finalisation declaration you are not obliged to give payment summaries and a payment summary annual report to the Commissioner of Taxation covering these amounts.

If you choose not to report these amounts through STP, you will be required to give payment summaries to your employees and a payment summary annual report to the Commissioner covering these amounts.


Under “Reportable employer superannuation contributions” (page 23) it says:

If you cannot (or choose not to) provide ... RESC through STP, you must provide this information on a payment summary and provide us with a payment summary annual report. The payment summary must not include amounts reported through STP.