The 9.5% Super Guarantee Contribution (SG) you are obliged to pay on all Ordinary Time Earnings (OTE) is not Reportable Employer Super Contributions (RESC).
These are RESC:
- contributions made under a salary sacrifice agreement - paid by employee
- employee-negotiated increases in super contributions as part of their salary package (ie. the employee has the capacity to influence the payment) - paid by employer
These are not RESC:
- super guarantee contributions (SG)
- compulsory super contributions required by the governing rules of a super fund or required by a state or territory law
- employer contributions made under a collectively negotiated industrial agreement
- post tax member voluntary contributions - contributions from after-tax income are considered the employee's personal super contributions and are not reportable employer super contributions (this is the case even if you deduct the amounts from your employee's take-home pay and forward the amount to their super fund on their behalf)
All RESC must be reported separately on employee income statements and in the system:
- salary sacrificed to super payments must be set to be paid direct to a super fund (either in the deduction settings on the employee's pay run inclusions page or on the deduction line in each pay run) in order to appear on the income statement as RESC. See below for further explanation/illustrations.
- if employer contributions to super is selected (on the employee's pay run inclusions page or on via the Adjust super option on the Actions button in the pay run) this will automatically be reported as RESC on the income statement. See below for further explanation/illustrations.
There are 3 ways you can have RESC show up on the income statements.
- Opening Balances
- Pre-Tax deduction paid to a super fund (salary sacrifice Super)
- Super adjustment specified as an employer contribution
These methods are described in detail below
If you are migrating from another payroll system and have recorded RESC payments in your old system, you can set RESC payments in the employee opening balances by following these steps:
- Open the employee file that you wish to apply the RESC amounts to and click on the "Opening Balances" menu item on the left hand side
- If you want to record RESC payments that were over and above the SG amount but weren't salary sacrifice deductions (ie. you/the employer, paid the super, it wasn't deducted from the employee's earnings) you can enter the total of these payments on the Super & PAYG tab, in the "Employer Super Contributions" section
- If you want to record RESC payments that were made as part of a salary sacrifice arrangement (these amounts were deducted, pre tax, from the employee's earnings), you can do so on the Deductions tab in the Opening Balances.
**NOTE: For deduction amounts to appear as RESC amounts on the income statement they must be a pre-tax or salary sacrifice deduction and have the RESC check box ticked
You can find more about setting opening balances here
If you want a pre-tax deduction to be recorded as a RESC payment on the income statements, you can either:
Do this manually in each pay run...
- From within a pay run, click on the employee you want to record the RESC payment for and click the "Actions" button, select "Make a Deduction"
- Select a deduction category. For it to be recorded as a RESC payment it must be a pre-tax deduction or salary sacrifice super.
- Next, you need to select a super fund. This is important as a pre-tax deduction will only be recorded as a RESC payment if it's paid to a super fund.
- Enter in the payment amount and verify all the values are correct.
- Hit Save
Or set up a recurring deduction on the employee's Pay Run Inclusions page - to do this go to the employee's record...
- go to the Pay Run Inclusions page
- click on Add in the Deductions section
- select Salary Sacrifice to Super as the type of deduction
- select the way the amount will be arrived at
- enter the $ or % amount
- set the payment method to pay a super fund (and select a fund from the drop down menu)
- choose the effective from date
- hit Save
NB. you can decide here when the salary sacrifice to super deduction will expire, click on the drop down menu to see the available options.
The third way a super payment will be recorded as a RESC payment is if you make Employer Contributions (ie. you pay the extra super, it isn't deducted from the employee's earnings).
Again, you can either:
Make employer contributions "manually" in a pay run (eg. for a once off payment):
- From within a pay run, click on the employee you want to record the RESC payment for and click the "Actions" button and select "Adjust Super"
- Select the "Employer Contribution" adjustment type
- Enter the contribution amount and check that all the values are correct
Or set up a recurring payment, on the employee's pay run inclusions page:
- click on Add in the Super Adjustments section
- select the contribution type
- choose the method this amount will be arrived at
- enter the $ or % amount
- choose the effective date
N.B. you can decide here when the employer contribution will stop, click on the drop down menu to see the available options.
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