Salary Sacrifice

Dan2021

I was wondering if someone could point me in the right direction.

 

If a staff member earns $50,000 p.a. + super 9.5 % and  they also want to salary sacrifice $5,000 pre tax,  do I enter the staff members hourtly rate as $25.6410 ( $50,000 divided by 52weeks divided by 37.5 hours)  and then process the salary sacrifice amount of $96.1538 ( $5,000 divided by 52) or do I need to adjust thier package to $45,000 ( $50,000 less the salary sacrifice of $5,000)  ie decrease thier hourly rate to $23.0769 ( $45,000 divided by 52weeks divided by 37.5 hours) and then process the $96.1538 as the salary sacrifice amount

 

Steven_M

Hi @Dan2021 

 

The way to look at salary sacrifice is rather than the money going to the employee's bank account it is going to the employee's superannuation fund. For example, the employer pays the employee $100 amount, this is then divided by $75 take home and $25 to the superannuation fund, the employer is still paying $100 to that employee it's just being split by the employee according.

 

In terms of setting that pay rate it would be the amount that you are wishing to pay the employee. For example, if the amount you are paying the employee is $40,000 per year and the employee is salary sacrificing 10% you would enter $40,000 as the Annual Salary in AccountRight. The 10% salary sacrificing occurs after you pay the employee.