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Processing Salary Sacrifice

Salary sacrifice allows an employee to redirect a portion of their pre-tax salary into their superannuation fund. This reduces their taxable income while boosting their retirement savings. The sacrificed amount is paid as an additional employer super contribution.

Step 1: Create a Salary Sacrifice Pay Item​

If a salary sacrifice pay item does not already exist:

  1. Navigate to Payroll > Pay Items and click Add Pay Item.
  2. Set the pay item type to Deduction.
  3. Name it Salary Sacrifice - Super (or similar).
  4. Set the calculation type to Fixed Amount or Percentage of Gross.
  5. Configure tax settings: salary sacrifice reduces the employee's taxable gross pay.
  6. Configure super settings: the deducted amount should be reported as an RESC (Reportable Employer Super Contribution).
  7. Click Save.

For more details, see Create a New Pay Item.

Step 2: Add the Pay Item to the Employee​

  1. Go to Payroll > Employees and select the employee.
  2. Open the Pay Items tab.
  3. Add the Salary Sacrifice - Super pay item as a default pay item.
  4. Enter the agreed amount or percentage.
  5. Click Save. The pay item will automatically appear in future pay runs.

Step 3: Process in a Pay Run​

  1. Open the pay run from Payroll > Pay Runs.
  2. The salary sacrifice deduction will appear automatically for the employee.
  3. Verify the amount is correct. Adjust for the current period if needed.
  4. The employee's gross pay remains the same, but their taxable income and net pay are reduced by the sacrifice amount.
  5. The sacrificed amount is added to the employee's super contribution for the period.

STP Reporting​

Salary sacrifice amounts are reported to the ATO as Reportable Employer Super Contributions (RESC) in STP submissions. Myaccountant handles this automatically when the pay item is correctly configured.