PRODUCT: M, L COUNTRY: Australia
Please note: as we have been receiving phone calls regarding superannuation, we are not a superannuation fund. Please ask your employer who they pay your superannuation to.
Update 17 June 2013: Saasu supports the new Superannuation Guarantee Contributions (SGC) percentage increases for future years. As an example transactions dated prior to 1 July 2013 calculate at 9% and up until 30 June 2014 calculate at 9.25%.
Update 1 July 2014: From 1 July 2014, SGC percentage will update to 9.50% and it will continue to increase automatically in future years. The user is not required to take any action, this will happen automatically.
How to enter Superannuation Guarantee Contribution Payments
When you enter a payroll transaction that contains an SGC (Superannuation Guarantee Contribution) superannuation amount, Saasu puts the money owed to the employee’s super company against a Liability: Employee SGC Super Payable account. We do this because the employer now owes the employee this SGC super (in the form of a liability) to the employee’s nominated super company.
At the same time, Saasu puts the same amount of money against the Expense: Employee SGC Super account. We do this because the employer has incurred an expense (despite not having paid for it yet).
When you make a payment to the employee’s superannuation fund, you need to clear the Liability: Employee SGC Super Payable account by selecting it when you choose the account for that purchase invoice or journal entry. The effect of doing this clears away the Liability account.
If these payroll accounts are not visible in your pick list, select Settings > Account List and tick Payroll Accounts to make them visible.
You will also need to store super account information for Fairwork reforms requirements.
Payments are typically handled in two ways:
- You create a purchase for each Superannuation company with each line item representing the SGC payable for each employee. The down side of this approach is that it’s harder to do a year end SGC super payments reconciliation per employee. You can only do this at Super Fund level.
- You create a purchase per employee to each super company. When they make payments to the super company, they apply a payment to multiple purchases at once.
You can use a tag such as SGC for these transactions. This makes it easier to list the transactions in reports and lists for payment processing and super account reconciliation.
For both methods described above, a fast way to do this is to duplicate the previous transactions for super for the previous pay cycle and amend the amounts/summary field for the new pay period. Alternatively, you can batch them up into reporting period frequency for your super company (i.e. 4 weekly SGC payables into one-monthly purchase with payment).
There are two steps to this process:
- Create a contact for each super company payment destination. IMPORTANT: This is typically a payment destination so you may have multiple contacts within one Superannuation Company (eg AMP Super or AMP Life).
- Enter the specific employee data against that contact:
- The comment icon next to a pay item is where you store the data. To find this, select View > Employees.
- Click the pencil icon to open up the employee.
- Choose the Default Pay tab.
- In the Employer Contributions section you will see/add SGC Super as an example.
- Click the comment icon beside the pay item dropdown.
There is also a comment icon in specific payroll transactions beside that pay item. However, what you enter there only applies to that particular transaction. This is so we can track changing or custom/one-off super account details per pay transaction over time for workchoice compliance reasons.
What account allocations do I use?
Typically the Liability: Employee SGC Super Payable account would be selected in these purchases. This account typically builds up as payroll transactions are created with the SGC Employer Contribution pay item in them.
How do I apply payment to these purchases?
You can use two methods to do this:
- If you want to process these using a Direct Entry (ABA) file, you can tick the ones you need to pay from the Purchase List screen (click Purchases in the main menu and filter for unpaid purchases). You can then click the Pay link above the list to access the Payment screen. Once you save this screen, a file used in online banking to process all the payments for those purchases becomes available. Note that for the the Direct Entry file to work in online banking, each contact/fund needs to have their bank details added to their record in their Contact details screen.
- Alternatively, you can apply one payment at a time as you pay each fund separately by cheque (check) or via online banking.
Thresholds and Limits
Currently Saasu doesn’t support threshold calculations (upper or lower) for various types of pay items that relate to pensions, superannuation, and other benefits. We plan to add this capability in the future.
If you have thresholds or limits like this, you can monitor these manually via a spreadsheet. Alternatively, you can add them in as the thresholds are met (instead of removing them later date if the thresholds aren’t met). There are several methods depending on the rules and requirements for your specific zone. We may not cover them all in the following examples.
There are several ways to handle thresholds and limits depending on your preference and procedures. Consult your accounting adviser if you aren’t sure which method is best for your particular situation.
NOTE: To reverse a pay item amount, you add the pay item but include the amount as a negative number.
Here are some candidate methods for handling thresholds and limits:
- Remove the pay item from Pays until the final pay for the threshold calculation period.
- Reverse the amount in the final pay for the threshold calculation period where the threshold isn’t met.
- Reverse the amount in the first pay of the next threshold calculation period that relates to the accrual for the previous threshold calculation period where the threshold wasn’t met.
- Add an adjusting pay by creating a pay for that employee with just that one pay item reversing the amount. Remove all the $0 or unused pay items before saving the transaction.
- Do your adjustments in bulk at the end of each quarter or year. (This may not be possible depending on the laws and regulations that pertain to the threshold or limits). You would need to do this using an adjusting pay or within a normal pay as a special pay item added in.