Salary Sacrifice Setup: Non-Super Employee Benefits

If an employee salary sacrifices qualifying for non-super benefits (e.g. a gym membership or a car), here's how to set up their income and salary sacrifice pay items. In this case, employer super guarantee is not calculated on the salary sacrificed contribution.

Income pay item setup

On the Pay Item Liabilities form (MPPP1025):

• Select both of the Liable for Superannuation (SG) and Liable for Qualifying Earnings (QE) checkboxes.
• Set the ATO category to Gross Payments.

Salary sacrifice pay item setup

On the Pay Items form (MPPP2210):

• Set the Type to Employee Super.
• Set the Taxation field to Pre-tax deduction : Standard PAYG.
• On the Additional Info tab, set the Category to SS Salary Sacrifice.

On the Pay Item Liabilities form (MPPP1025):

• Select both of the Liable for Superannuation (SG) and Liable for Qualifying Earnings (QE) checkboxes.
  Note:

  Since the salary sacrifice pay item is a pre-tax deduction, you need to set it as liable to correctly reduce the qualifying earnings base employer super guarantee calculation.
• Set the ATO category to Salary sacrifice Other.

Example

Let's say Emma earns $3,000 each pay period and salary sacrifices $50 to a gym membership benefit. So, her employer calculates income tax on $2,950. And because the sacrificed benefit is not liable for super, Emma's qualifying earnings for employer super contribution are $2,950. At a rate of 12% (the minimum compulsory rate for 2026–27), this results in an employer super contribution of $354.

Emma makes no employee super contributions, so the total super paid for the pay period is $354.

Here are the amounts that would be reported to the ATO as part of Single Touch Payroll (STP):