Superannuation Setup Made Easy - Simplify Your Employee Allowances

Setting Up Superannuation Overview

This Setting Up Superannuation article documents how to set up both Compulsory Superannuation and Superannuation Sacrifice Allowances for your Employees in a step by step process. Since the setup for all types of allowances is almost identical, we will include documentation for those additional types of allowances as well. The process is simple. Create your new allowance/deduction then select the G/L accounts to be used by SapphireOne.

For each allowance the setting up of the employee’s bank accounts is a different process. 

• Superannuation items – The employee’s bank account details are entered on the Superannuation page of an employee inquiry
• Other Allowances- The employee’s bank accounts are entered on the second page of an employee inquiry in the More Details page. 

This article will document Compulsory Superannuation first, followed immediately by Salary Sacrifice. The SapphireOne user then only has to read through the documentation provided for the Compulsory first or skip over it and read the documentation immediately after it for Salary Sacrifice. 

For both Compulsory and Salary Sacrifice Superannuation, once a selection is made for either, SapphireOne automates the procedure to a great extent. 

While Compulsory super is basically the same for all, Salary Sacrifice super for each employee will probably have vastly different requirements, as each employee is allowed by the ATO to make different arrangements so long as they fall within the ATO guidelines at the time. 

In any SapphireOne data file only a single allowance will have to be set up for each superannuation item, for your SapphireOne Payroll/HR. One for the Compulsory Super and another for Salary Sacrifice. For both these types of superannuation. The details are then entered into the employee’s master record on the Superannuation page. 

Superannuation Bank Accounts

While you will note that the Bondi Blue demo data file uses a single bank account for all types of Superannuation in the Bondi Blue data file, it is recommended that a separate bank account be created for each type of superannuation that is being collected by SapphireOne. 

If a single bank account is used it will be difficult at a later date to perform a detailed Superannuation reporting. If a number of Bank Accounts are created, a detailed report may be created for each Bank Account or a report may be created that merges the Superannuation Bank Accounts. Note it is a lot easier to merge reports rather than separate them.

Basic Allowance/deduction setup procedures

• Allowance or Deduction – No Matter what type of allowance or deduction it is, it has to be created first. To do this go to: Payroll/HR > Administration > Allowance Inquiry.
  • Radio Buttons – Selection the appropriate radio button, Allowance or a Deduction.
• G/L Accounts – For all Allowances/Deductions, these, are entered into the Allowance or Deduction when they are being created. 
  • Linking G/L Accounts – These Allowances/Deductions must then be linked to using the Controls Page of an employee Inquiry by going to: Payroll/HR > Administration > Employee Inquiry > Controls Page.
  • Single or Multiple Allowances – For Superannuation items the user will probably only have the single Allowance or Deduction although provision has been made for multiple items.
  • Other Allowances/Deductions – For other types of Allowance, the user will probably have to create one for each employee, therefore careful planning will be required for ID’s and Names of these other allowances. 
• Employee Banking Details – These Allowances or Deductions are linked within the Employee’s master record.
  • Linking Banking Details – For Superannuation Allowances/Deductions, the employee bank accounts are linked into each Employee’s master record by going to: Payroll/HR > Administration > Employee Inquiry > Superannuation Page. 
  • Non-Superannuation Allowances – For car or telephone Allowances/Deductions for example, the Employee banking details for these are entered into the lower section of this page: Payroll/HR > Administration > Employee Inquiry > More Details Page 
• Standing Transactions – Finally link the allowance or deduction into the employees Standing Transaction sheet. To do this go to: Payroll/Hr > Payroll > Standing Transactions.
  • This only has to be done once as from then on when a Pay Run is executed SapphireOne will read these Standing Transaction details for each employee into the Working Transactions Inquiry. 
• Testing – Once all is complete get a copy of the live data file and execute some Pay Run’s and see if the allowances are correct for each employee. The process is as follows.
  1. Perform the changes with the back up copy
  2. Run a Pay Run
  3. If SapphireOne flags any errors or the values are incorrect.
     1. Re-output the data file from the backup
     2. Make the necessary changes.
  4. If the Pay Run and the back-up of the live data file complete successfully, then run the data file with completed Pay Run in Sapphire Single user.
  5. Run up single User.
  6. Copy the changes made to the allowances into the live data file using SapphireOne Client Server mode.

Never perform trial or test Pay Runs with your live data file. 

Step 1 – Creating Any Allowance or Deduction

To do this go to Payroll/HR > Administration > Allowance Inquiry. SapphireOne will then display the Allowances and & Deductions that are set up in SapphireOne. In this example we see the allowances and deductions that have been set up in the Bondi Blue Demo. 

The two allowances set up in Bondi Blue are as follows.

• SUPER – Superannuation Allowance
• SUPERSAC – Superannuation.Sal. Sacrifice

Creating A New Superannuation Allowance/Deduction

While the form name is Allowance as seen below, allowances may be set up either as an Allowance or a Deduction with the appropriate selection of a radio button.  Documentation for this option commences immediately below. 

Select the New button from the main tool bar. SapphireOne will then display the new Allowance screen with the default settings. For the entry of data for the new allowance. Please note that by default the radio button is set to Allowance.

Creating a Compulsory Superannuation Allowance

Allowance or Deduction Area

• Allowance ID & Name – Any ID or name may be used but it is recommended that the same ID and name as set up in Bondi Blue be maintained. 

Classification Area

• If classes have been set up for allowances the class may be entered here.

Package Area

• Radio Buttons – For compulsory Super select Allowance.
• Type – From the drop-down menu select Before Tax. This is important as it is added to the employee’s income and not included with their normal taxable income. 
• Multiplier – Enter ‘1’ for no multiplication.
• G/L ID – Enter in the required G/L account. These must be set up before setting up any Allowances or Deductions.
• Multiple Departments – SapphireOne will allow the setting up of Payroll/HR with multiple departments. Unless there is a specific requirement for this leave this un-checked.
• Calc Method – Use the drop-down menu and select as required. 
• Appearance – If you wish to change the default selection then from the drop-down menu select Wages or another choice.
• Salary Sacrifice MP – Do not select the Salary Sacrifice MP (Money Payment) checkbox.
  • Maximum % up to $ –  Do not enter a value as it is linked to the above.
• Custom Sort – Check with SapphireOne support staff before using this item.
• Payment Summary / STP Position – Select Superannuation Employer Contributions. 
• Data Entry must have Job Project and G/L – Check with SapphireOne support staff before selection of this checkbox.

Use This Allowance When Calculating Group

• Checkboxes – Leave the items in this list all unticked.

Creating A Superannuation Salary Sacrifice Deduction

Allowance or Deduction Area

• Allowance ID & Name – Any ID or name may be used but it is recommended that the same ID and name as set up in Bondi Blue be maintained. 

Classification Area

• If classes have been set up for allowances the class may be entered here.

Package Area

• Radio Buttons – For Salary Sacrifice Super select Allowance.
• Type – From the drop-down menu select Before Tax. This is important as it is added to the employee’s income and not included with their normal taxable income. 
• Multiplier – Enter ‘1’ for no multiplication.
• G/L ID – Enter in the required G/L account. These must be set up before setting up any allowances or deductions.
• Multiple Departments – SapphireOne will allow the setting up of Payroll/HR with multiple departments. Unless there is a specific requirement for this, leave this un-checked.
• Calc Method – Use the drop-down menu and select as required. 
• Appearance – If you wish to change the default selection then from the drop-down menu select Wages or another choice.. 
• Salary Sacrifice MP – Select the Salary Sacrifice MP (Money Payment) checkbox if a Money Payment invoice is to be created by SapphireOne for this Salary Sacrifice contribution.
  • Maximum % up to $ –  Enter a value as as required for the above.
• Custom Sort – Check with SapphireOne support staff before using this item.
• Payment Summary / STP Position – Select Superannuation Contributions. 
• Data Entry must have Job Project and G/L – Check with SapphireOne support staff before selection this checkbox.

Use This allowance When Calculating Group

• Super Contribution – This item in the list must be ticked.

Step 2 – Entering Superannuation & Banking Details into the Employee’s Master Record

Once we have the Superannuation details set up, we can set up the banking details in the employee’s master record. To do this select the Employee Inquiry option from the Administration Menu from Payroll/HR > Administration > Employee Inquiry. This is the list of Employee’s from the Bondi Blue Demo and we will select DB (Diane Banister). 

SapphireOne opens with the page displaying the first item on the Pages drop-down menu, the Details Page. No changes are required here.

We will need to navigate to the 4th Page, the Controls Page at Payroll/HR > Administration > Employee Inquiry > Controls Page.

If this is the first time that this employee’s master record has been accessed all of the items seen in the list below should be checked for accuracy. 

In the SapphireOne data file the following items must be used as follows.

• Superannuation is used for the Compulsory Superannuation component. 
• Super. Contribution is used for Salary Sacrifice Superannuation. 

Note the following in the Bondi Blue data file that we are using as the example.

• Compulsory – The ID of SUPER with the name of Superannuation Allowance is for the Compulsory component 
• Salary Sacrifice – The ID of SUPERSAC and the name of Superannuation Sal. Sacrifice for the salary sacrifice component. 
  • While the Superannuation data entry field is mandatory for any data file where Payroll/HR mode is being used, the Salary Sacrifice is optional. But it is recommended that both are set up now as one of your employee’s may want to salary sacrifice at a later date. 
  • If it is set up now, all the Payroll/HR officer will have to do is access the employee’s Superannuation page of their record and enter in the required details. 
• Checking Details – First check that both of these have been linked to the correct data entry fields. SapphireOne will then insert the name or description into next column taken from the Allowances master file. This is also a means to check that you have inserted the correct ID’s. 

Types of Superannuation

There are a number of Superannuation types that are payable for employees, and the rules for these are set by the government. This article will only be documenting the setting up of the two Superannuation payments as seen listed below in SapphireOne Payroll/HR.

• Compulsory: This is a fixed amount and SapphireOne looks at what has been linked to the Superannuation allowance data entry field. This is the currently set at 10.5% by the Australian Government and is payable in addition to the employee’s salary and is not taxed. 
• Salary Sacrifice: This is set by agreement between the Employee and the Employer and SapphireOne looks at the Super.Contribution data entry field. The rate as a percentage or fixed dollar amount is set as requested by the employee. This is also payable before tax but is then currently taxed by the Australian government at 15%. 

For example, an employee may be paying the maximum rate of tax on their salary. Any Salary sacrifice that they make will be removed from their taxable income before tax and then taxed separately at a rate of 15% (Within limits as set by the Australian Government).

SapphireOne will then calculate the tax to be paid on their remaining wage. It will then calculate the tax at 15% on the Salary Sacrifice component, and add the two together. 

When the Employee’s Super Report is run prior to the End of Month the Salary Sacrifice will show under Contributions; Period, MTD (Month To Date) and YTD (Year To Date). 

Step 3 – Entering Employee Superannuation details

When entering Compulsory or Salary Sacrifice Superannuation on the employee’s page, the only difference is the user’s selection of the Compulsory check box on each line. If selected SapphireOne will recognise it as Compulsory Superannuation.  If un-selected it will mark it as other types of Superannuation and treat it accordingly.

From Payroll/HR Mode menu select Payroll/HR > Administration > Employee Inquiry > Superannuation Page 

To set up any Superannuation payment for an employee use the keyboard short cut (Command /) or select the button to add in a new line as seen for the compulsory and salary sacrifice payments below. 

Payments for any superannuation to an employee may be made to multiple bank accounts for both types of superannuation. However, a single payment to a single bank account for an employee would be the most common arrangement. 

It should also be noted that for the compulsory payments the user will receive a warning if the compulsory payments do not currently total 10.5% of the employee’s salary. 

In this new line enter the details in as required. Do not select the Compulsory check box and then enter the fund details. This will identify to SapphireOne that it is not Compulsory Superannuation but Superannuation Sacrifice. Finally enter in either a percentage of the salary or a fixed dollar amount to be used as the Salary Sacrifice.

Once you have completed this select Save and this will close this screen and return you to the Employees Inquiry list. 

Step 4 – Modifying the Employee’s Standing Transaction

From the Payroll Menu select Standing Transactions Inquiry at Payroll/HR > Payroll > Standing Transactions Inquiry.

This is the list of Employee’s from the Bondi Blue Demo and we will select DB. To modify the Employee’s record you have to highlight it then select Modify . 

Alterations to any employee’s record in a Standing Transactions Inquiry will make permanent changes to the employee’s Payroll/HR details. Temporary changes to the employee’s pay details may be made on a pay by pay basis in the Working Transactions function. 

Any Allowance or Deduction must be incorporated into the Employee’s Standing Transactions master record manually. Once this has been completed the employee’s record will not require and alterations unless permanent changes are required. 

Line Details Area

This area will display the existing line details entered into the Standing Paysheet Area when you highlight them. Alternatively when you select the new button or the (Command / ) shortcut an new line will be added ready for data input into the Standing Paysheet area. 

The ID Data Entry field is a linked field and the wildcard @ or ? symbol may be used to bring up a full list of allowances to select from. This will allow the user to select the correct ID of the Allowance for inclusion in the Employees Standing Transactions.

If any alterations are made to an existing Superannuation Salary Sacrifice for any employee the line entry for the Sacrifice MUST be deleted with the Delete button and then inserted again with the Add button or the (Command / ) shortcut to allow SapphireOne to re-calculate the Superannuation Salary Sacrifice Allowance correctly. 

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