Download - EPORTABLE MPLOYER SUPER CONTRIBUTIONS - Reckon Australia 2009-10 RESC.pdf · Reckon Limited does not provide taxation, financial, legal, accounting or investment advice and cannot

R

of 28

REEPPOORRTTAABBLLEE EEMMPPLLOOYYEERR SSUUPPEERR CCOONNTTRRIIBBUUTTIIOONNSS

INTRODUCTION ...................................................................................................................................................... 2

............................................................................................... 4QUICKBOOKS CHANGES: GUI AND REPORTS

.................................................................................................................... 7IMPACT OF RESC INTRODUCTION

..................................................................................................................................... 9RESC OVERALL PROCESS

................................................................................................................... 10OPTION 1: CALC DIFF NOT USED

............................................................................................................... 11OPTION 2: WHEN CALC DIFF USED

...................................................................................................................................... 14CONTRIBUTION TYPES

.................................................................................... 15SETTING UP QUICKBOOKS TO REPORT ON RESC

TO EXAMPLESA

.................................................................................................................................................... 17

The information provided is compiled from publicly available information and is intended only as a general summary. You should satisfy yourself as to the current requirements of Australian tax laws and regulations and other laws and consider your own financial, business and tax objectives and obligations, financial situation, accounting and other particular needs before acting upon any information provided in this information sheet.

You should consider getting professional advice.

Reckon Limited does not provide taxation, financial, legal, accounting or investment advice and cannot be held responsible in any way for your conduct (including but not limited to any reliance) relating to this information sheet.

Copyright © 2009, 2010 Reckon Ltd. Note: For more information on installing Service Pack 1 and upgrading from QuickBooks 2009/10 Release 1 (R1P) to QuickBooks 2009/10 Release 2, please see the updated QuickBooks 2009/10 Installation and Upgrade Guide.

of 28

IINNTTRROODDUUCCTTIIOONN

BBaacckkggrroouunndd From July 2009 the Federal Government is introducing new legislation designed to enhance the fairness in the application of income tests to ensure that the government assistance is consistent and fair.

Reportable Employer Super Contributions (RESC) is one of the measures introduced, addressed in QuickBooks 2009/10 Service Pack 1 and has resulted in changes to the way superannuation contributions are reported. For further information, see the following ATO web pages:

Reportable Employer Super Contribution http://www.ato.gov.au/businesses/content.asp?doc=/content/00189411.htm

Changes to income tests http://www.ato.gov.au/individuals/content.asp?doc=/content/00189164.htm ‐ Please copy and

eb browser paste the link to the address bar in your w

BBrriieeff EExxppllaannaattiioonn ooff LLeeggiissllaattiioonn Put simply the payment summary needs to show the value of super contributions for an employee which, had that contribution not have been made, would have shown in the Gross Payments field on the payment summary. Typically these contributions would be either, or in some cases both, of the followin g contribution types:

• oyer Additional Empl

• Salary Sacrifice

The ATO documents make use of a phrase called “employee influenced”. This is a good way of earning what types of contributions are reportable. l

http://www.ato.gov.au/businesses/content.asp?doc=/content/00189411.htm

http://www.ato.gov.au/individuals/content.asp?doc=/content/00189164.htm

of 28

AAbboouutt tthhiiss ddooccuummeenntt This document is concerned mainly on how QuickBooks has been changed to manage the RESC requirements. It is meant to be read by people with a working knowledge of the existing QuickBooks superannuation functionality. It is also expected that the reader is familiar with the advice provided by the ATO.

TTeerrmmss aanndd AAbbbbrreevviiaattiioonnss Text Explanation

RESC Reportable Employer Super Contributions Reportable Means that the amount is shown on the payment summary in a new field called RESC Calc. Diff. Refers to the checkbox found within Preferences>Employees and Payroll called

for SA and/or CA payroll items. Calculate RESC difference SA Super Guarantee Act (SA) EA Employer Additional (EA) RR Productivity (PR), RC Redundancy (RC), CA Collective Agreement (CA) {note: this is a new super category} SS Salary Sacrifice (SS) CC Co Contribution (CC) SP Spouse Deduction (SP) MV Member Voluntary (MV) The Collective Agreement (CA) superannuation payroll item type has been introduced in QuickBooks 2009/10 Service Pack 1 to allow businesses to record Enterprise Bargaining / ollective Agreements separately from Super Guarantee Act (SGA). C

of 28

QQUUIICCKKBBOOOOKKSS CCHHAANNGGEESS:: GGUUII AANNDD RREEPPOORRTTSS The June 2009 QuickBooks contains the following graphical user interface (GUI) changes to manage the RESC requirements:

QQ

Super Category: Collective Agreement A new category, called Collective Agreement (CA), has been created to differentiate between the minimum national egislation and any company based agreement.

Super Category: Collective Agreement A new category, called Collective Agreement (CA), has been created to differentiate between the minimum national egislation and any company based agreement. l

l

Calculate RESC difference for SA and/or CA Calculate RESC difference for SA and/or CA payroll item types This checkbox gives the business the option of having one super payroll item to be used to store legislative (including company wide agreements) and employee influenced contributions. For example, a business may decide to add the employee’s salary sacrifice amount or additional contributions to the existing legislative amount. This checkbox affects all employees.

payroll item types This checkbox gives the business the option of having one super payroll item to be used to store legislative (including company wide agreements) and employee influenced contributions. For example, a business may decide to add the employee’s salary sacrifice amount or additional contributions to the existing legislative amount. This checkbox affects all employees.

UUIICCKKBBOOOOKKSS CCHHAANNGGEESS:: GGUUII AANNDD RREEPPOORRTTSS The June 2009 QuickBooks contains the following graphical user interface (GUI) changes to manage the RESC requirements:

Reportable Employer Super Contributions Exempt (checkbox) This checkbox defaults to OFF (un‐ticked). In almost all cases this checkbox would be left un‐ticked. This checkbox essentially provides an option for a business to overcome an unusual situation.

If the Reportable Employer Super Contributions Exempt is OFF, then amounts will be displayed on the Payment Summary depending on whether they are associated with reportable or non‐

table super payroll items. repor

If the Reportable Employer Super Contributions Exempt is ON, then the payment summary will show lank in the RESC field. b

of 28

Super Reports The Super Report by Employee and the Super Report by Fund now have a column called RESC Amount. This column can be added to these two reports by the regular Modify Report… functionality.

of 28

INB Payment Summary Payment summaries produced for the 2009‐2010 financial year need to have additional employer and salary sacrifice contributions shown within a new field called Reportable employer superannuation contributions. The following image is an extract from the new payment summary.

7 of 28 Page

IIMMPPAACCTT OOFF RREESSCC IINNTTRROODDUUCCTTIIOONN The following tables show various business scenarios with the most common ones first.

Basic requirements only

Situation The business makes the standard employer contribution of 9% (i.e. SA). No other type of contribution is made.

Change mpact i

No changes needed. The payment summaries will not show any amounts in the RESC field.

Basic requirements as well as salary sacrifice contributions

Situation Super type SA is used for the standard employer contribution of 9% and super types SS is used for salary sacrifice arrangements.

Change mpact i

No changes needed. QuickBooks will automatically show the salary sacrifice amounts in the RESC field.

Basic requirements, salary sacrifice and individual agreements

Situation Super type SA is used for the standard employer contribution of 9% and super types SS is used for salary sacrifice arrangements. The contribution type Employer Additional (EA) has been used for various individual agreements.

Change mpact i

No changes needed. QuickBooks will automatically show the SS and EA amounts in the RESC field

Basic requirements, salary sacrifice, individual agreements and spouse deductions

Situation Super type SA is used for the standard employer contribution of 9% and super types SS is used for salary sacrifice arrangements. The contribution type Employer Additional (EA) has been used for various agreements with individual employees.

Change mpact i

No changes needed. QuickBooks will automatically show the SS and EA amounts in the RESC field

Basic requirements, salary sacrifice and company wide agreements

Situation Super type SA is used for the standard employer contribution of 9% and super types SS is used for salary sacrifice arrangements. The contribution type Employer Additional (EA) has been used for company wide agreements.

Change impact

There will be need to use the new Collective Agreement (CA) contribution type instead of the EA contribution type. This is because all amounts relating to EA will be shown in the RESC field on the payment summary. This is incorrect in this case as company wide agreements should not show as RESC.

Basic requirements including salary sacrifice arrangement

Situation The SA super payroll item is used for both the mandatory 9% superannuation and the salary sacrifice arrangements

of 28

Basic requirements including salary sacrifice arrangement

Change impact

The business will have to separate the single contribution into two. The legislative portion would need to be recorded against SA and the salary sacrifice amount would have to be recorded against SS.

of 28

RREESSCC OOVVEERRAALLLL PPRROOCCEESSSS

There are two broad ways in which QuickBooks can be configured to manage RESC reporting. These are:

Option 1: Preferences RESC checkbox (Calculate RESC difference for SA and/or CA payroll item types) left unticked This is where any reportable super contribution needs to be recorded against either the SA or EA type. All contributions for the other types, including SA and CA, would not be included in the RESC amount on the payment summary. When this configuration is adopted the YTD amounts for the SA and EA

Option 2: Preferences RESC checkbox (Calculate RESC difference for SA andpayroll item types) ticked This is where contributions of SA or CA type, which are in excess of the default amount, are included in the RESC field on the payment summary.

/or CA

The above diagram illustrates how these options operate:

of 28

OOPPTTIIOONN 11:: CCAALLCCUULLAATTEE RREESSCC DDIIFFFFEERREENNCCEE FFOORR SSAA AANNDD//OORR CCAA PPAAYYRROOLLLL IITTEEMM TTYYPPEESS NNOOTT UUSSEEDD

The following image illustrates the RESC related functionality where:

• ting) No employee record is ticked as being exempt (this would be the normal set

ains OFF (i.e. un‐ticked) • The RECS checkbox, found within Preferences, rem

Under this configuration amounts for contributions types:

• EA and SS will be reported as RESC on the payment summary

• SA and CA will not be reported as RESC on the payment summary

• CC, MV, PR, RC and SP will not be reported as RESC on the payment summary

11 28Page of

OOPPTTIIOONN 22:: WWHHEENN CCAALLCCUULLAATTEE RREESSCC DDIIFFFFEERREENNCCEE FFOORR SSAA AANNDD//OORR CCAA PPAAYYRROOLLLL IITTEEMM TTYYPPEESS UUSSEEDD

The alternate option is where any extra contribution is absorbed into either the SA or CA contribution types. Providing the RESC checkbox is selected within Preferences, QuickBooks will

eed not be reported. separate that portion which is reportable and that portion which n

The above image illustrates the RESC related functionality where:

• No employee record is ticked as being exempt (this would be the normal setting)

• The RECS checkbox (Calculate RESC difference for SA and/or CA payroll item types), found within Preferences, is turned ON (i.e. ticked)

Under this configuration amounts for contributions types:

• EA and SS will be reported as RESC on the payment summary

• SA and CA, in excess of the default amount, will be reported as RESC on the payment summary

• SA and CA up to the default amount will not be reported as RESC on the payment summary

• CC, MV, PR, RC and SP will not be reported as RESC on the payment summary

Calc Diff: Illustration The following image illustrates the manner in which QuickBooks calculates the difference between the default amount for the payroll item and the actual amount for the payroll transaction.

of 28

of 28

Explanation The rate/amount for Super Guarantee Act (SA) or Collective Agreement (CA) that shows on every employee paycheque will be the default rate/amount as specified in the Employee Super Details window unless dynamically changed when the paycheque is created.

The am ny existing amounts which are as a result of: ounts calculated above will be added to a

• Salary Sacrifice (SS) arrangements and

• Other Employer Additional (EA) amounts

Example Mary, who receives $5000 per month, has negotiated a 12% super instead of the statutory requirement of 9%. She also salary sacrifices $1000 each month. QuickBooks would be used in the following manner:

• a super payroll item of type Super Guarantee Act (SA) with a default rate of 9% would need to exist

• the SA super item would be assigned to Mary’s employee super details window with the te changed to 12% ra

Once the Calculate RESC difference for SA and/or CA payroll item types is set to ON, then QuickBooks will work out the difference between her individual superannuation rate and the default for the super payroll item, which in this case is 3% and add it to RESC amount. The following table shows this process and the respective amounts:

Pay $5000 Super SA 12% = $600 $600 Calculate RESC difference for SA and/or CA payroll item types ON Difference between 12% and 9% = 3% =$150 Reportable to RESC

$150

Salary Sacrifice (SS) $1000 Total RESC amount calculated for Mary $1150 RESC amount on payment summary and Empdupe file $1150

T

he same principles above apply when working with rates, amounts or quantity.

of 28

CCOONNTTRRIIBBUUTTIIOONN TTYYPPEESS The following table shows the various superannuation types and whether or not they are reportable for RESC purposes:

Contribution Type RESC Comment

Legislative Employer Contributions

No Refers to the federally legislation based employer contribution of 9% (or higher amount based on the industry the employee is in).

Group Contract Employer Contributions such as a Collective Agreement

No Refers to agreements such as those found in awards and enterprise bargaining documents that result in all affected employees being entitled to a greater employer contribution.

Additional Employer Contributions

Yes These are contributions which exceed what the employer needs to contribute. The effect is for the gross payment to the employee is lower than what it would otherwise had been.

Employee Personal Deductions ‐ treated as an after tax deduction

No The Gross Payment amount on the employee's payment summary is not reduced by this deduction.

Employee Personal Deductions ‐ treated as a before tax deduction

Yes This is known as a salary sacrifice deduction and results in the Gross Payments figure on the employee's payment summary being reduced.

of 28

SSEETTTTIINNGG UUPP QQUUIICCKKBBOOOOKKSS TTOO RREEPPOORRTT OONN RREESSCC QuickBooks 2009/10, with Service Pack 1 applied, will include SS and EA payroll item amounts in the RESC field on the payment summary. Amounts for SA and CA payroll items will be subject to the following rules:

Where Calc Diff option is OFF (i.e. unticked) SA and CA amounts will not be included in the RESC field on the INB Payment Summary and the Empdupe file

Where Calc Diff option is ON (i.e. ticked) For SA and CA amounts, the portion of the payment up to the payroll item default amount will be

tem default will be included in the RESC field. excluded. The portion in excess of the payroll i

The following tables illustrate the above rules:

Super Payroll Item Types Included in RESC field

Employer Additional (EA) Salary Sacrifice (SS)

Yes

Co Contribution (CC), Member Voluntary (MV), Productivity (PR), Redundancy RC), Spouse Deduction (SP) (

No

Super Payroll Item Types Calc Diff Option

Comparison between payroll item default and the actual employee contribution

Included in RESC field

Super Guarantee Act (SA) ollective Agreement (CA) C

OFF

NA No

ON

Up to default mount a

No

In excess of fault amount de

Yes

There may be a need to review your existing super payroll items:

Employer Additional (EA) super types If any of these payroll items include non reportable contributions (e.g. company wide agreements) there would be a need to create a replacement payroll item of Collective Agreement (CA) type.

Super Guarantee Act (SA) super type If any of these payroll items include reportable contributions (e.g. individual agreements) there would be a need to do one of the following:

• Create a new payroll item of Employer Additional (EA) type. Then enter the reportable portion into the employee’s record against the new payroll item. The non‐reportable portion will remain in the SA super type payroll item.

of 28

OR

• If deciding to use the comparison functionality, tick the Calc Diff checkbox in Preferences. Then check that the payroll item shows the current legislative 9% as the default. The next step will be to go to each employee’s record and enter the actual amount in the Super Details window.

of 28

AATTOO EEXXAAMMPPLLEESS The ATO has produced a document titled RESC Employer Guide. The examples provided in this document, from pages 17 to 28, are shown below together with ways in which QuickBooks can handle these business scenarios.

ATO Example (Jill: page 6)

Under Jill’s industrial agreement, her employer must contribute 10% of her ordinary time earnings to an industry super fund. Jill has a long standing agreement with her employer to salary sacrifice an extra $10,000 of her salary to the same super fund. Only the $10,000 portion of the employer contributions are reportable employer super contributions that Jill’s employer must report on her payment summary. This is because all of the following apply: the contributions are additional to the compulsory contributions Jill’s employer has to make Jill directly influenced the amount of extra super her employer pays on her behalf. the contributions reduced Jill’s assessable income Assumptions:

Jill is paid on a monthly basis. Payroll items are already setup for CA and EA contribution types. Jill receives a regular monthly payment from July 2009 to June 2010 The Calc. Diff. checkbox, in Preferences, is left unchecked. Business Administrator QuickBooks 2009/10

SP1 Comment

Enters the rate of 10% against the CA superannuation type.

Accepts entry. None of this amount will be shown on the payment summary as RESC.

Enters $833.33 against the EA superannuation type.

Accepts entry. Assume that Jill is paid monthly. ($10,000 / 12 months =833.33)

Reviews the 2009/2010 payment summary for Jill.

Shows $10,000 in the RESC payment summary field.

None of the super contributions related to the industrial agreement has been regarded as RESC. All of employee additional super contributions (EA) have been shown in the RESC field.

of 28

ATO Example (Jan: page 7)

Ian is an employee of XYZ Pty Ltd (XYZ). While negotiating his common law employment contract, XYZ contracts with Ian to pay Ian’s super contributions at the rate of 15% of his salary. XYZ has no policy in regard to the employer contributions it pays in respect of its employees. It allows employees to negotiate any rate of employer contribution they wish in exchange for reduced salary. Ian and the other employees have contributions made at on their behalf at varying rates. XYZ must record the extra contributions as reportable employer super contributions. The amount recorded is 6% of salary as this is additional to the minimum contributions XYZ must make under Superannuation Guarantee law. Assumptions:

Ian’s salary is $50,000 A payroll item is already setup for the EA contribution type Ian receives a regular monthly payment from July 2009 to June 2010 The Calc. Diff. checkbox, in Preferen checkeces, is left un d. Business Administrator QuickBooks

2009/10 SP1 Comment

Enters the rate of 9% against the SA superannuation type.

Accepts entry. None of this amount will be shown on the payment summary as RESC.

Enters 6% against the EA superannuation type.

Accepts entry.

Reviews the 2009/2010 payment summary for Ian.


None of the super contributions related to the standard legislation has been regarded as RESC. All of employee additional super contributions (EA) have been shown in the RESC field.

of 28

ATO Example (Mike: page 8)

Mike pays $1,000 extra to his employee’s super fund each year if they meet their performance targets. Under their employment agreements Mike’s employees can elect for the money to be paid to them as a bonus and this will be income to the employee. If they make no election, Mike will pay the amount to their super fund. Any amount that would have been income to the employee and that is able to be influenced by your employees is a reportable employer super contribution. Assumptions:

a payroll item is already setup for the EA contribution type The Calc. Diff. checkbox, in Preferences, is left unchecked. all employees have reached their performance targets for the 2009‐2010 financial year no employee has elected to have the money paid as a bonus no employee has salary sacrifice contributions Mike restricts any other super contribution to that covered by Federal legislation (SGA of 9%) Business Administrator QuickBooks

2009/10 SP1 Comment

In June 2010 an amount of $1,000 is added to each pay to a EA super payroll item

Accepts entry.

Reviews the payment summaries for the 2009‐2010 financial year.

All show $1,000 in the RESC field.

This is because the whole amount paid via the EA contribution type is included in the RESC figure.

of 28

ATO Example (Alla: page 9)

Alla is a business operator who employs three workers. Jo, one of Alla’s workers, has asked her to pay $50 per fortnight to her super fund from her post‐tax pay so she can increase her super savings. Although Jo has directly influenced the amount of super Alla pays on her behalf, the additional $50 Alla pays is not a reportable employer super contribution because it comes from Jo’s after‐tax income. The amounts are not employer super contributions and they are a part of Jo’s assessable income. Assumptions:

a payroll item is already setup for the MV (member voluntary) contribution type Jo has received a regular payment for all of the 26 pays in the 2009‐2010 financial year Jo does not participate in salary sacrifice arrangements Alla pays, on Jo’s behalf, 9% of her wages into a super fund. Thus, the minimum federal legislation applies. Business Administrator QuickBooks

2009/10 SP1 Comment

Opens Jo’s record and enters $50 against the super payroll item setup as MV.

Accepts entry

Reviews Jo’s payment summary for the 2009‐2010 financial year.

The RESC field is blank.

This is because none of the amount paid via the MV contribution type is included in the RESC figure.

of 28

ATO Example (Amanda: page 10)

Amanda operates a business and employs 20 workers. Under their industrial agreement Amanda must contribute 10% of her employees’ ordinary time earnings to an industry super fund. Apart from voting for the agreement, Amanda’s employees have no direct influence over the amount of super she contributes. This means the super contributions Amanda makes on behalf of her workers are not reportable employer super contributions. Assumptions:

a payroll item is already setup for the CA (Collective Agreement) contribution type all employees have their super configured to the CA type Amanda does not provide salary sacrifice arrangements Amanda does not allow employees to have post tax super deductions Business Administrator QuickBooks 2009/10

SP1 Comment

Processes the pays up to the last pay in June 2010.

Reviews the payment summaries for the 2009‐2010 financial year.

The RESC field is blank on all payment summaries.

This is because none of the amount paid via the CA contribution type is included in the RESC figure.

of 28

ATO Example (Christine: page 10)

Christine is a member of a public sector super scheme. Under the scheme, Christine’s employer must make contributions on her behalf and Christine must also contribute 3% of her post‐tax income. None of these contributions are reportable employer super contributions because Christine has had no influence on the amount of super her employer pays to meet their federal law requirements. The amounts paid from Christine’s after‐tax income are not reportable employer super contributions because they are included in her assessable income. Business Administrator QuickBooks

2009/10 SP1 Comment

Sets up a super payroll item configured to the MV contribution type.

Accepts entry. Whilst this deduction is required under Christine’s scheme, and therefore not voluntary, the use of the MV contribution type is suitable for RESC compliance purposes. The name given to the super payroll item could be suitably descriptive.

Reviews Christine’s payment summary for the 2009‐2010 financial year.


This is because none of the amount paid via the MV contribution type is included in the RESC figure.

of 28

ATO Example (Danny: page 11)

Danny works for a large company and is a member of a defined benefit super fund. The company makes contributions to the fund according to the fund rules and employer contributions are determined by the fund’s actuary. Danny therefore accrues benefits which grow with his length of service. The amount the company must contribute on Danny’s behalf, as decided by the fund’s actuary, is not a reportable employer super contribution as Danny has no influence or choice about this amount. Danny can choose to contribute between 1% and 5% extra from his pre‐tax income. Danny completes an election form with his employer to contribute an extra 5% this amount goes to Danny’s account within the fund. This extra amount is a reportable employer super contribution and must be reported on Danny’s payment summary. Assumptions:

A salary sacrifice payroll item has been setup Danny chooses 5% extra super Danny’s salary is $50,000 and this amount does not change during the year Danny receives regular payments for all pay periods in the 2009‐2010 financial year Business Administrator QuickBooks 2009/10

SP1 Comment

Opens Danny’s record and enters 5% against the salary sacrifice super payroll item.

Reviews the 2009/2010 payment summary for Danny.


All of employee additional super contributions (SS) have been shown in the RESC field.

of 28

ATO Example (Vangie: page 13)

Vangie is a business operator who employs several full‐time and casual employees. Some of Vangie’s casual employees rarely earn more than $450 in any given month, which means Vangie does not have to make any contributions on their behalf under Superannuation Guarantee law. Vangie’s payroll system automatically calculates super contributions for her employees at the rate of 9% of the total salary or wages she pays them, even if they earn less than $450 in any month. This means Vangie is making super contributions for some employees even though she doesn’t have to. She does this because it is easier to do so under her payroll system. Because Vangie’s employees have no choice about how much super Vangie contributes on their behalf, the contributions she makes are not reportable employer super contributions. Assumptions:

Vangie has 9% assigned against the SA super type The super payroll item, for the SA super type, shows blank in the Monthly Minimum Threshold window Business Administrator QuickBooks

2009/10 SP1 Comment

Processes the pay as normal during the course of the financial year.

Reviews the 2009/2010 payment summary for Vangie.


This is because none of the amount paid via the SA contribution type is included in the RESC figure.

of 28

ATO Example (ABC Pty Ltd: Page 13) Scenario 1

ABC Pty Ltd employs a range of different types of workers on individual contracts and collective agreements. ABC has always paid employer contributions at the rate of 10% of salary. The company policy is long standing and is documented in ABC’s record keeping system. No employee is receiving less than 10% employer contribution support. ABC must document how it determined that the employee did not influence the contributions above Superannuation Guarantee law. If employees can vary their contribution rate then the amounts over super guarantee will be reportable employer super contribution. Assumptions:

The company documents showed that no employees were able to influence their super contributions. The Calc. Diff. checkbox, in Preferences, is left unchecked. A super payroll item, of CA type, is used for all employees. ABC Pty Ltd does not provide salary sacrifice arrangements. Business Administrator QuickBooks 2009/10

SP1 Comment

Processes the pay as normal during the course of the financial year.

Reviews the 2009/2010 payment summaries.

The RESC field is blank for all employees.

This is because none of the amount paid via the CA contribution type is included in the RESC figure.

of 28



The company was not able to show employees had no influence over the amount of the super contributions. The Calc. Diff. checkbox, in Preferences, is left unchecked. A super payroll item, of CA type, is used for all employees. Another super payroll item, of EA type, is used to capture the amount of super in excess of 9% Daisy, an employee of ABC, has 12% of her wage paid by the employer into his super fund. Daisy payment for the year was $50,000. This excludes those types of payments which are not included for calculation purposes (e.g. overtime). Business Administrator QuickBooks

2009/10 SP1 Comment

Opens Daisy’s record and checks that: the rate for the CA super is 9% the rate for the EA super is 3%

Reviews Daisy’s 2009/2010 payment summary.

The RESC field shows $1,500. ($50,000 * 3%)

This is because the whole amount paid via the EA contribution type is included in the RESC figure

of 28



The company was not able to show employees had no influence over the amount of the super contributions. The Calc. Diff. items checkbox, in Preferences, is ticked (i.e. checked). A super payroll item, of CA type, is used for all employees. Daisy, an employee of ABC, has 12% of her wage paid by the employer into his super fund. Daisy payment for the year was $50,000. This excludes those types of payments which are not included for calculation purposes (e.g. overtime). Business Administrator QuickBooks 2009/10

SP1 Comment

Goes to Preferences and checks that the Calc. Diff. checkbox is ticked.

This will have the effect of comparing the actual amount paid to the employees against the default amount. The difference is regarded as RESC.

Opens the CA super payroll item and checks that the default is 9%.

Opens Daisy’s record and changes the rate for the CA super to 12%

Reviews Daisy’s 2009/2010 payment summary.

The RESC field shows $1,500. (That is $50,000 * 3%)

This is the difference between the actual amount of 15% against the default amount of 9%

of 28

ATO Example (Rob: Page 15)

Rob operates a real estate business and hires Marcus. Marcus is unsure of how much he will make in any given year but he wants to save more than the minimum for his retirement. Marcus requests that 20% of his total remuneration be paid to a super fund on his behalf. Marcus pays Rob monthly and 20% of Rob’s commission earnings are sent to his super fund and 80% are paid to Rob in the form of salary. At the end of the financial year Rob calculates Marcus’s sales commission as $100,000. Rob has made employer super contributions totalling $20,000 and has paid Marcus $80,000 in salary. Rob will need to work out which part of the super contribution Marcus influences so he can show this amount as Marcus’s reportable employer super contributions. Rob does this by working out the contributions he would have made on Marcus’s behalf had Marcus not asked him to contribute more than the minimum he had to contribute under the Superannuation Guarantee law. Rob calculates super guarantee on the pre salary sacrifice salary. However, this can not be the total $100,000 as Rod needs to work out how much he could pay Marcus in cash and still meet his super guarantee obligations. Rob works out the minimum he would have to contribute for Marcus would be $8,257. This means the amount he must report as reportable employer super contribution is $11,743; that is, $20,000 ‐ $8,257 = $11,743. Rob does the by multiplying the total cash remuneration by 100/109. $100,000 * 100/109 = $91,743 The super guarantee portion is therefore $100,000 – $91,743 = $8257 Rob then subtracts the $8257 from the total employer super contributions. The reportable employer super contribution is $20,000 ‐ $8257 = $11,743 Rob will report the extra $11,743 as a reportable employer super contribution and the $80,000 as gross payments on Marcus’s payment summary. Rob’s payroll system calculates salary and super guarantee contributions are based in this way for all employees. Rob keeps records of how he calculated the reportable employer super contributions. Assumptions:

The Calc. Diff. checkbox, in Preferences, is left unchecked. A super payroll item, of SA type, is used for all employees. Another super payroll item, of SS type, is used to capture the amount of super in excess of 9% The amounts are calculated and paid he e icates in June, as t xample indBusiness Administrator QuickBooks

2009/10 SP1 Comment

Enters the following amounts into the last pay in June 2010: SA type = $8,256 SS type = $11,743

Reviews the 2009/2010 payment summary for Marcos.

The RESC field shows $11,743

This is because the whole amount paid via the EA contribution type is included in the RESC figure