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Salary Sacrifice - Payroll Setup

Summary

How do I setup Salary Sacrifice for an employee in Payroll?

Detailed Description

To setup Salary Sacrifice as a new Payroll Pay Rate item:

Step 1:

Click on the Payroll icon on toolbar button.

  • Click on the Setup Lists tab.
  • Click on Pay Rates tab.
  • Click on the Add button.

 

  • Fill out the details:
    • Name: Salary Sacrifice
    • Per: leave blank
    • Hrs/Units:leave blank
    • Rate: leave blank 
    • (Note: Per, Hrs/Units, Rate may vary between employees. These can be set up individually for each employee.)
    • Tick Taxable check box.
    • In the Optional Cashbook Account box, click on Include with wages radio dial to select.
    • Tick the Reportable Employer Super Contributions check box.
  • Click on the OK button.

 

To set up Salary Sacrifice as a new Wages/Salary Pay Type for an Employee:

Step 1:

  • Click on Employees tab.
  • Click on employee to highlight.
  • Click on the Select Employee button.

 

  • Click on Default Pay Rates tab.
  • Click on the Wages/Salary tab.
  • Click on the Add button.

 

  • In the Add a new Wages/Salary Item window, fill in the following details:
    • Name: select Salary Sacrifice from the drop down list.
    • Per: click on the drop down arrow to select an option. e.g. Pay.
    • Hrs/Units: e.g. 1, as we are opting for a nominated amount per pay.
    • Rate: e.g. -200 ENTER THIS AMOUNT AS A NEGATIVE
    • Taxable check box should be ticked.
    • Optional Cashbook Account is Include with wages.
  • Click OK button to save.

Note:  For this example - The employee's (John Brown) Gross Pay will be reduced by $200 , thus the amount of PAYG Withholding Tax will also be reduced, as it is calculated on the reduced Gross amount ($700). Super will be calculated on the original Gross amount ($900).  

 

Default Pay Rates for Wages/Salary screen should now look like this:

 

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