Additional super payment to be deducted/paid from employee pay
One of our employees has requested a set out amount to be deducted from their fortnightly pay.
This is the first time we have had an employee requesting to do this so have a few questions - I have also reached out to our accountant for assistance too but thought you guys may be able to assist too.
- I can see in the Superannuation section of the employee card there is two options "Employee Additional" and "Salary Sacrifice".....my understanding is:
- Employee Additional is paid from their after tax/net pay and they then notify their superfund so the tax adjustment can be done end of year when they lodge their tax return
- Salary Sacrifice is paid from the pre-taxed income - therefore reducing their taxable income.
- As an employer are we obligated to do provide salary sacrifice option? From an employer or processing of payroll perspective is there a reason we would not want to provide salary sacrifice options? Is there many differences when processing payruns or would either option be the same once the category has been setup against the employee card?
- If Salary Sacrifice, therefore reducing their taxable income, as we still need to calculate their SG entitlement on their ordinary income (OTE), not the reduced income.....now this one is prob a stupid question but as I haven't done it before so I'm going to just ask! I'm assuming MYOB is set-up to do this automatically and we don't have to do any extra steps to manually calculate the super on the OTE?
- I know when we create our superannuation contributions through our preferred fund clearing house there are fields for "Employer SG" (i.e. standard that we use) and then "Employee Additional" and "Salary Sacrifice" so from the actual contribution I don't see that being too different .....just an extra field to fill in.
- Is there a standard form they should be filling out to nominate this - i.e. from ATO website or from their superfund.....or is an email from the employee sufficient? Assuming at this point the employee would have to nominate which option they'd prefer (employee additional or salary sacrifice)?
As I said, this is the first time we've been asked about this and while waiting for the accountant thought I'd reach out to the community here for so I can get your view of it too....especially as you guys would have experience with the processing through MYOB side of things.
TIA
