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Salary Sacrifice and PAYG Lodgement

MV-8

Hi There,

We had 2 staff members who purchased computer as part of their salary sacrifice.

I understand this is exempted from FBT and the PAYG withholding will be calculated based on the reduced income.

The payroll activity summary via MYOB is still showing the regular pay full amount under Wages, and the salary sacrifice component is showing under Deductions.

When I lodge the monthly PAYG to the ATO:

1. Do I show the full regular amount under W1 or deducted amount?

2. If it's full regular amount under W1, where do I allocated the deduction component in the lodgement?

Thanks again for your input and help.

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Accepted answers

Tracey_H

Hi @MV-8

The Payroll Activity summary report is filtered by the classification of the payroll category in the Payroll Categories window, so if the payroll category is in the Wages tab it will be included in the Wages column. As such, you do have to manually deduct any applicable deduction amounts.

As a former bookkeeper I'd recommend that you lodge your BAS and IAS through online BAS in AccountRight. It will save you so much time.

If you're not able to or don't want to lodge online, I'd recommend setting up the manual BAS lodgement in the Prepare BAS/IAS window. Once that's set up correctly, you'll just need to reconcile the amounts and then copy the fields into the ATO portal.

Prepare your activity statement online

Prepare your activity statement manually

Please let me know if you need further help.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

All comments

MV-8

Hi Tracey,

Thanks for the reply. So if I lodge the IAS via ATO Portal, I would just have to manually deduct the salary sacrifice component from the regular gross pay. Is that correct?

I've checked through the payroll reporting centre STP, and the gross amount is showing the reduced pay correctly.

It's just the Payroll Activity summary is still showing Normal full amount gross wages and the salary sacrifice component under deduction.

Thanks again for your help

Tracey_H

Hi @MV-8

Thanks for your post. When setting up the W1 field in your BAS you would select the Salary Sacrifice payroll category to reduce the Total wages reported in that field. The W1 field should then equal the Wages amount less Deductions on your Payroll activity report.

This help article explains how to set up your BAS:

Get ready to lodge activity statements online

This link to the ATO website has information on what needs to be reported on your BAS:

PAYG withholding labels

Please let me know if you need further help.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.