PAYG Summaries – how do I treat salary sacrificed super??

 

 

A very common payroll deduction in MYOB and Xero is when the employee elects to salary sacrifice super.  This super deduction is not taxed for PAYG purposes and sent in by the employer to the employee’s superannuation fund.

When PAYG Summaries are prepared, the salary sacrificed super must be NETTED with the gross wages for purposes of the gross wage amount on the PAYG summary.

For example, if the employee earns a total gross income of $60,000 and has salary sacrificed $10,000 of super during the year, the Gross Wage amount on the PAYG summary will be $50,000.  It should be set up in MYOB this way:

Capture1

Then, in the next screen (RESC – Reportable Employer Super Contribution), you would need to enter the salary sacrificed super as shown below:

MYOB RESC

In Xero, the setup is different, any salary sacrificed super contributions need to be recorded in an employee’s pay as a super line, ensuring that the RESC contribution type is selected. This will ensure the gross earnings are reduced and the correct amount will be displayed as RESC on the employees payment summary.

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