Employees may make personal contributions to superannuation funds. These contributions are either before tax deductions (salary sacrifice) or after tax.
Employee contributions are fund specific and a separate deduction code must be used for each superannuation fund. Employee Contributions are deductions and can be either an amount per pay or a percentage of the employee's earnings.
The contributions can be created either through additions and deductions or directly from the superannuation funds and then attached to employee records. If you set the employee contribution up through additions and deductions, you will need to attach it to the super fund before attaching to the employee. Unlike other additions and deductions, Employee Super Contributions are attached to the employee record in Super Details, not Additions and Deductions.
There are some fields that you cannot change once the deduction has been created. These are greyed out when editing. They include code, category (deduction before tax or deduction after tax) and type (amount or percentage). If the category or type is incorrect, you will need to create a new deduction.
The steps below outline the process for setting up both an amount and percentage based contribution in the super fund. If you are creating the contribution from additions and deductions, start at step five.
Note: In MicrOpay, deductions are treated as negative values. If you tick Qualifying Earnings (QE), then the deduction will reduce the QE and the salary that was sacrificed will be excluded (or deducted) from QE.
For example, if an employee receives Normal of $1,000 and has a $100 deduction and QE is not ticked, then the QE value would be $1,000, i.e. it is included. If QE is ticked, QE would show $900.00 and exclude the salary sacrifice.
The ATO specifies that amounts sacrificed to superannuation should be included in qualifying earnings, therefore you wouldn't tick Qualifying Earnings (QE).
Create an Amount Super Deduction
Go to Payroll, Maintenance, Superannuation, Fund.
Edit the fund you need to add the deduction to.
Select the Employee Contributions tab.
Click New.
Enter the Code, Shortcut Key and Description.
In Category, select Deduction Before Tax if the contribution is a salary sacrifice or Deduction After Tax if the contribution is an after tax Voluntary Contribution.
Select Amount in Type.
Leave the Amount field blank, as this may be different for each employee. The amount is specified on the Employee record.
Ensure Employee Contribution is ticked. This field differentiates employee superannuation contributions from other deductions.
If required, tick Include in EarlyPay. This field is only available where EarlyPay is enabled for the database. Ticking this will reduce the accrued earnings available in EarlyPay, ensuring that the employee has enough to cover their obligations.
Select the STP Reporting tab.
In STP Phase 2, for a Deduction Before Tax, select the Reporting Group as Salary Sacrifice and the Reporting Subgroup as code S (Superannuation (RESC)). For a Deduction After Tax, select the Reporting Group as Exclude from STP Reporting.
Leave Qualifying Earnings (QE) unticked. Deductions are treated as negative values, meaning when selected, they reduce the QE.
Click OK to save the new contribution.
Click OK to save changes to the superannuation fund.
Create a Percentage Super Deduction
Go to Payroll, Maintenance, Superannuation, Fund.
Edit the fund you need to add the deduction to.
Select the Employee Contributions tab.
Click New.
Enter the Code, Shortcut Key and Description.
In Category, select Deduction Before Tax if the contribution is a salary sacrifice or Deduction After Tax if the contribution is an after tax Voluntary Contribution.
Select Percent in Type.
Leave Percent blank, as this may be different for each employee. The amount is specified on the Employee record.
From the Hours Type dropdown, select the hour to include in the calculation.
If you select Overtime in Hours Type, you can then select the Overtime Type. This is greyed out if Overtime is not selected in Hours Type.
When you select Other Leave in Hours Type, you can then select Other Leave Reasons. This is greyed out if Other Leave is not selected in Hours Type.
If you select User Defined Leave in Hours Types, you can specify which User Defined Leave to use. This is greyed out if User Defined Leave is not selected in Hours Type.
From the Rate Type dropdown, select which hourly rate (held in the employee record) is used in the calculation. Options are Normal, Award and Other rate.
If additional values must be included in the percentage calculation, tick the Process Deduction Calculation checkbox. This includes in the calculation the value from any additions with Include in Deduction Calculation ticked.
Ensure Employee Contribution is ticked. This field differentiates employee superannuation contributions from other deductions.
If required, tick Include in EarlyPay. This field is only available where EarlyPay is enabled for the database. Ticking this will reduce the accrued earnings available in EarlyPay, ensuring that the employee has enough to cover their obligations.
Select the STP Reporting tab.
In STP Phase 2, for a Deduction Before Tax, select the Reporting Group as Salary Sacrifice and the Reporting Subgroup as code S (Superannuation (RESC)). For a Deduction After Tax, select the Reporting Group as Exclude from STP Reporting.
Leave Qualifying Earnings (QE) unticked. Deductions are treated as negative values, meaning when selected, they reduce the QE.
Click OK to save the new contribution.
Click OK to save changes to the superannuation fund.
Link an existing Deduction to the Superannuation Fund
If you have already set up the new Deduction in Additions and Deductions, you will need to link it to a Fund so that it can be selected in the employee record. You need to ensure that the Deduction as Employee Contribution is ticked before linking it.
Go to Payroll, Maintenance, Superannuation, Fund.
Edit the fund.
Select the Employee Contributions tab.
Click Select.
Highlight the new Code from the grid and select OK.
Click OK to save the Fund.
Attach the Contribution to the Employee
Go to Payroll, Maintenance, Employees, Employees.
Edit the Employee who needs the deduction attached.
Select Superannuation Details.
Click Add in the Superannuation Contributions section.
Select Employee.
Then, select the Employee Contribution.
Enter the Value.
OK to save the contribution.
Click OK to save the employee record.