Why did you enter slip in the first place? Because come end of year when things closed you must make sure all expenses for that year are expensed out so expenses can be zero by Jan 1. That is why CPA does accrual method. It gives them a way to move expenses around into next year
Legally some companies can’t run accrual system but yes if legal issue not reason you run cash basis then I would suggest accrual method as it is a sure way to have ability to take care of this issue. Unfortunately I volunteer for a government entity and we are mandated to run cash basis so I have to make sure I expense literally everything on December 31 and print check because Cash basis is not when it hits bank statement it is immediatly in the moment. If the check is dated 12/31 and not cashed til 2/1 it doesn’t matter it was already expensed out in the year before.
The above illustrates how to deal with the "super Guarantee"in australia. However, we have an employee who also is “sacrificing” some of his salary for super. That is: (SSS) Salary sacrifice Super. I have treated this SSS in the payroll as a deduction amount allocated to a Liability account. When I then make the salary payment, I add a line for the SSS transaction and nominate the Liability account. Is this an appropriate approach?
No. The SSS, like the PAYG, has nothing to do with the salary payment.
Lets look at this example, The employee is paid 2000 and has a SSS of 200.
The PAYG would be calculated on 1800, say 400.
The payslip would be:
Earnings: Salary 2000
Deduction: SSS 200
Deduction: PAYG 400
Nett: Owing to Employee 1400
Payment to employee 1400.
Payment to Super fund 200 plus SG contribution
Both the the SSS and SG can be posted to the same liabilities account.
Agree
But when I looked at doing that is a test business, l was not convinced the Australian localisation supports appropriate reporting via single touch payroll. Deduction payslip items do not appear to have the required custom fields and report transformation support.
Only those deductions that are specifically specified are required for single touch.
Other deductions, advance repayment - rent paid to employer, are not single touch reportable.
Also the SSS is not single touch reportable as that information comes via the Super fund.
However, the above payslip illustration does need modifying to get the single touch reporting correct.
Earnings: Salary 1800
Earnings: SSS 200
Deduction: SSS 200
Deduction: PAYG 400
Nett: Owing to Employee 1400
Now the single touch gross will be reported correctly as 1800, not the previous 2000
Our employee only started SSS in 4th quarter 2021, making a total SSS of $220. I realised I have to correct the STP financial year report as SSS is not to be included in gross payment. W1 on BAS should not include SSS either which is why I have picked this up when lodging BAS now. How can I apply your example here to my payroll so as correct gross amount appears on W1 and Payslip summary for STP prep. My payslip items are noted as ordinary time/overtime etc and number of hours, not “salary”:
Payslip item:
Summary page liabilities:
Also when the payment is made to the super fund, the SSS portion ought to be coded to SSS liability account? Presently I realise I have the total superannuation payment (guarantee + SSS) coded to the super liability account when should be split between the 2 accounts? But the superannuation expense account only includes super guarantee payments, should SSS also be included here and how?
Hope this makes sense.
Manager has not included compulsory superannuation for me in the past. The ATO requirements and definition of W1 in Manager are listed in this thread Aust localisation inconsistent with ATO requirements
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It should include almost all in payslip earning
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Not be effected by payslip Deductions (such as salary sacrifice) and Contributions
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Note your employee pay is decreased by salary sacrifice but W1 is not as it reports Gross pay
What version of Manager are you using?
I downloaded the latest version this morning, 21.8.61
So, seems I will need to manually reduce W1 by SSS total for the quarter and do the same for each STP. That’s ok, just wondered if there was automatic functionality for that.
Do you have any advice on coding of the SSS payments vs the compulsory super payments?
That would make it inconsistent with ATO requirements, so no.