Configure Salary Sacrifice Deduction Items

Overview

Salary sacrifice arrangements require a Deduction item to be configured so that they can be processed in a pay. The Deduction pay item needs to be configured so that it is reported to the ATO in line with their STP 2.0 reporting requirements.

Salary Sacrifice for Labour Hire (PSI) Employees

If the 'Engagement Type' in the employee profile is set to 'Labour Hire', salary sacrifice is not supported for STP Reporting. If you have processed salary sacrifice amounts for Labour Hire employees in Astute, you'll need to process an adjustment so their wages are reported under the 'Casual' engagement type instead. Please see this article for steps on how to do this.  

The below examples are some common configuration setups for Salary Sacrifice deduction items. 

Child Support, Union Fees, Workplace Giving and Non-Super Post Tax Deductions

Non-super post-tax deductions, including but not limited to Child Support, Union Fees, and Workplace Giving are configured with the following settings.

• Deduction Type: Standard
• Pre Tax Deduction box not checked
• Super Exempt box usually unchecked
• STP Report Settings > Payment Section set to the relevant category:
• Not Applicable
• Child Support
• Union Fees
• Workplace Giving

The STP Report Settings > Salary Sacrifice section does not apply.

Novated Lease, Computer, and Other Non-Super Salary Sacrifice

For any salary sacrifice that is not super, including but not limited to novated leases or computer/laptop sacrifices, the deduction pay item should be configured as follows:

• Deduction Type: Standard
• Pre Tax Deduction box checked
• Super Exempt dependent on the item
• STP Report Settings > Payment Section: Not Applicable
• STP Report Settings > Salary Sacrifice: Other

Please note that all pre-tax deductions should fall into salary sacrifice.

Superannuation Salary Sacrifice

Superannuation salary sacrifice is an arrangement where additional contributions are made into an employee’s super fund outside of the Superannuation Guarantee Contribution (SGC) required. 

If an employee has a superannuation salary sacrifice arrangement, the deduction item is configured as:

• Deduction Type: Super Deduction
• Pre Tax Deduction box checked
• Super Exempt box not checked
• STP Report Settings > Payment Section: Reportable Super
• STP Report Settings > Salary Sacrifice: Superannuation

Post Tax Superannuation Deductions

A post tax superannuation deduction doesn’t require reporting via STP, but should still be configured as a Super Deduction. A post tax superannuation deduction may be configured as:

• Deduction Type: Super Deduction
• Pre Tax Deduction box not checked
• Super Exempt box not checked
• STP Report Settings > Payment Section: Not Applicable

The STP Reporting Settings > Salary Sacrifice section does not apply.

PAYG Tax Deductions

If a deduction needs to be configured for PAYG tax, the below configuration is the only allowable combination:

• Deduction Type: PAYG Tax
• Pre Tax Deduction box not checked
• Super Exempt box not checked
• STP Report Settings > Payment Section: PAYG

Note: This article is intended to provide examples only, and should not be relied upon as qualified tax or legal advice. If you require any clarification on Salary Sacrifice arrangements, please refer to the ATO or contact your accountant or financial adviser for advice on the correct configuration of the system for your business