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If your employees work under a building industry award which indicates that superannuation is payable as a flat amount or 9.5% of gross wages (whichever is greater), this article explains a way to set up your AccountRight payroll to achieve this.
As this example, an employee is paid fortnightly and the minimum superannuation required for this frequency is $95.00. For more information on the minimum amount of superannuation required in your situation, check the relevant industry award or check the ATO website.
This article is provided for guidance only - it might not be suitable for your business requirements. If you need clarification, check with your accounting advisor or post your question below.
Click Employee and select the employees to receive this category.
Click Exempt and select all wage categories that are not required to accrue superannuation. This will be as specified by the award.
You can calculate the exclusion amount by using this formula:
Minimum Superannuation required by the award=$XX.XX
$XX.XX divided by 0.095=$ Exclusion value
Applying this formula to this example:
Minimum Superannuation required by the award=$95.00
$95.00 divided by 0.095=$1000.00
This is the gross wages that are to be excluded each pay.
9.50% of $1000.00 is $95.00. You have already paid $95.00 superannuation as the flat rate. You do not have to pay it again so you exclude it from further required superannuation calculations. You will insert $1000.00 as the excluded wage amount because superannuation will have already been calculated as part of the flat rate category.
Task 3 - Record the pay
When you pay the employee, the correct amount of superannuation stipulated by the award will be calculated automatically:
Pay where 9.5% of gross wages is less than the minimum for the award and the minimum is still added to the pay.
As you can see, the employee has earned $975 gross wages on this pay. This would normally equal $92.62 superannuation. As a result of the award, they are being given a flat rate of $95.00.
Pay where 9.5% of gross wages is more than the award minimum. 9.5% of the gross wages is added to the pay as superannuation.
You can see that gross wages are $1200. The Building Award Super Flat $ is always being used to generate superannuation on each pay, in this example $95.00. When the gross wages being paid exceed the flat rate of superannuation (equivalent to 9.5%), the Building Award Super or Greater category is being activated and it is generating the additional super calculation that is required. In this example, an additional $19.00 is calculated.
The software has calculated the required values for superannuation.
9.5% of $1200=$114.00.
This is the required amount of superannuation on the pay.
$95.00 + $19.00=$114.00.
This is the calculated amount of superannuation on the pay.
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