Salary Sacrifice & SGC rejected
Hi there, I was off on holidays earlier in the year and another member of staff did payroll for a couple of weeks. Payroll was processed for an employee with mistakingly 100% of their earnings goin...
Forum Discussion
Hi GWH2024,
Thanks for your post, and welcome to the MYOB Community Forum.
If the 100% earnings of the employee was mistakenly salary sacrificed, you can adjust it by creating an adjustment pay run through a separate pay. More information can be found here. Regarding the super payment that was rejected and sent back to you, you will need to reverse and then reprocess the super payment. First step would be to reverse the whole super payment including the ones that were successfully paid and the rejected one. After that, you will need to record the successfully paid through pay liabilities. Lastly, reprocess the rejected payment. Detailed steps are provided through this link.
Feel free to post again anytime if you require further assistance.
If my response has answered your inquiry, please click "Accept as Solution" to assist other users in finding this information.
Best regards,
Doreen
Thanks for your reply Doreen,
Would you think the below would be the right way to handle it:
1) Reverse the superannuation payment. Payroll > Manage payments
2) Re-process the contributions that were correct. Payroll > Pay Liabilities > Superannuation
3) Record the rejected payment received back from the superfund. Receive Money > allocate to Superannuation Payable Liability account. Amounts for example only but lets say: I received $1100 back from the super fund - I allocate the $1000 Salary Sacrifice and the $100 SGC to the superannuation liability account.
When reversing and re-processing the payroll side, would you think:
As per the example above with the rejected payment being made up of $1000 that was Salary Sacrifice, and $100 was SGC.
1) Process a reversal in process pays- reverse the $1000 salary sacrifice, reverse the $100 SGC. Zero the tax. Net effect is paying the employee $1000 (which is offset by the $1000 received from the rejected payment). Would need to be a current date, or I process it in the month it happened and do a separate bank transfer for the amount (rather than using a bank file).
2) Re-process another pay for $100 SGC which I need to get back to the employee. Everything else zero.
3) On the employees next pay, add the amount of tax which should have been paid on the $1000 payment to ensure withholding tax is correct overall for the year.
Quite the scenario unfortunately.... trying to make sure I'm not missing a crucial step - thanks !
Hi GWH2024,
Regarding your concern about the returned super, here is a link that can provide more information and steps on how to record and reprocess the returned super. With the SGC concern, if a lump sum payment has been processed incorrectly, the solution is to locate the incorrect payment, reverse it, and then process it again correctly.
First, go to Setup >> Preferences >> Security, and check the box that says 'Transactions Can’t be Changed, They Must Be Reversed'.
To locate the lump sum pay, navigate to Find Transactions >> Payroll Category. Search by 'Payroll Category' and select the Salary Sacrifice category used. Look for the lump sum amount. Ensure your date range covers the payroll year or narrow it down if the customer knows approximately when they processed it. Alternatively, you can go to Reports >> Payroll >> Superannuation >> Accrual by Category, and filter the report to the Salary Sacrifice category used. There are other alternatives, but these are generally two of the easiest methods.
Once the transaction is open, go to Edit >> Reverse Transaction, and record the reversal.
Now, the payment can be reprocessed correctly by entering a new pay.
If the incorrect processing has occurred over multiple pays, this situation becomes more complex. It's recommended to seek assistance from a financial advisor, who will review all the pays where Salary Sacrifice was used and determine how much has been processed incorrectly.
Once the incorrect amount is known, a manual reversal for this amount can be processed. Then, it can be reprocessed correctly. This can be done as a bulk reversal and processed as pay, since the Australian Tax Office (ATO) is primarily concerned with Year-To-Date (YTD) amounts rather than individual pays.
If you are unsure what amount should be entered, you will need to partner with your accountant.
Feel free to post again anytime if you require further assistance.
If my response has answered your inquiry, please click "Accept as Solution" to assist other users in finding this information.Best regards,
Doreen
