Setting up Salary Sacrifice

Salary Sacrifice is used to distribute before tax income to a superannuation fund. This will reduce the tax the employee pays on their pay. You must:

• Set up an authority for the business that the salary is being sacrificed to.
• Set up a deduction transaction type with the above authority making sure, on the configuration tab, that the Taxable accumulator (or equivalent) is selected.
• Select the above deduction transaction type for the employee who is salary sacrificing in Employee Maintenance.
• On the Employee Maintenance > Payroll | Pay tab ensure that the ordinary time is the pre-sacrifice gross. This ensures all overtime and leave calculations are based on the correct value.

When a pay is processed the sacrifice amount will be deducted, before tax, automatically. At the end of a period, the sacrificed amount can be reported on and remitted to the authority.

Note: Ensure that the deduction is included in Gross and included in the Reportable Super tab for the payment summary configuration. Doing that reduces the reportable taxable income and correctly reporting to the ATO.