Forum Discussion

Experienced Cover User

6 years ago

Salary sacrifice into super - GL treatment

Hello everyone, I have a few employees using salary sacrifice into super in a few of my MYOB entities. I appears that salary sacrifice into super, when setup in MYOB recommended way, treats salar...

CloudMindAcc
6 years ago
Hi Michael_H

ATO+reporting+categories+for+Single+Touch+Payroll+reporting#expand-Superannuation
Reference in support note states:
Did you previously report salary sacrifice amounts on payment summaries? You don't need to assign the Gross wages category to salary sacrifice amounts. When reporting payroll amounts using Single Touch Payroll, gross wage amounts are reduced automatically by deduction amounts that are marked as a before-tax deductions. This includes salary sacrifice superannuation deductions.
Note that you assign the Reportable Employer Super Contributions (RESC) category to superannuation categories which handle 'reportable' superannuation payments (as classified by the ATO guidelines).

Below is a report that will help you review the Salary Sacrifice Transactions. You could save as a customised report so you can just run each month/quarter (changing the dates)

CloudMindAcc

Ultimate Cover User

6 years ago

Hi Michael_H

The journal entry below recorded in MYOB is correct. The Salary Sacrifice is not an expense to your business. The Gross Wagess is the expense.

1-1220 Electronic Clearing Account 0 (CR)

6-1400 Wages Expenses $X (DR)

2-1420 Superannuation payable $X (CR)

Your suggested journal below is incorrect and the GROSS wages must be recorded and reported to the ATO otherwise their payment summaries will be incorrect.

Michael_H
Experienced Cover User
6 years ago
Hi CloudMindAcc ,

Thank you for your input.

ATO specifically prescribes that salary sacrifice into super is not to be included into Gross payments, and requests to report it under 'Reportable Employer Super contributions' , see -

https://www.ato.gov.au/Forms/PAYG-payment-summary---individual-non-business/?page=2

That's why I would prefer to treat it as a Superannuation expense, rather than Salary expense.
- CloudMindAcc
  Ultimate Cover User
  6 years ago
  Hi Michael_H
  
  Salary Sacrifice is reported under the STP ATO reporting category as Reportable Employer Super Contributions.
  Refer below:
  - Michael_H
    Experienced Cover User
    6 years ago
    Hi CloudMindAcc ,
    
    I assume it does report correctly, and it means that GL expense of wages in MYOB is not equal to Gross Wages reported to ATO - and this is where I can see the reconciliation problem. Do you know if there any way to run a report on Salary sacrifice transactions and amounts?
    
    Thanks again for your help.
- CSASSOC
  6 years ago
  You are absolutely correct, Salary sacrificed super from Gross Wages is a deduction to the company as Superannuation Expense NOT Gross Wages & is reported as RESC in the PAYG Summary as such. MYOB does this incorrectly and should simply allow for the the Salary Sacrifice "type" to allow those amounts to be processed to Super Payable & Super Expenses but reduces the overall PAYG deducted from the reduced Gross Wages for the employee, otherwise you will overstate their Gross Wages for the year, unless you are particular to exclude the Salary Sacrifice Super category from the total Gross Wages when preparing the PAYG Summaries. Every Payroll report should reconcile and reflect the RESC amounts, but just makes it complicated with this process.