Salary Sacrifice and RESC

The ATO has ruled that salary sacrifice transactions that are part of the employer’s superannuation guarantee are not considered to be RESC. In Exolvo, Superannuation Fund and Employee Super Fund records contain separate salary sacrifice fields for the RESC and non-RESC components of salary sacrifice transactions. For example, the Employee Super Funds | Allowances tab contains the following salary sacrifice percentage fields:

• Salary Sacrifice (%)
• Salary Sacrifice RESC (%).

You can set up salary sacrifice as an allowance or a deduction depending on factors such as your organisation's employment contracts and costing requirements. Salary sacrifice transactions are usually recorded as Salary Sacrifice RESC (%) or Salary Sacrifice RESC ($), unless they are part of the employer superannuation guarantee contribution.

Influence

In Employee Super Fund records, allowance and deduction fields have Influence column fields.

If the employee's salary sacrifice transactions are part of superannuation guarantee contributions, then set Influence to "No" for all their Salary Sacrifice (%) fields. As a result, Exolvo will not consider the portion of contributions made under the minimum or over the maximum as RESC. Salary sacrifice transactions are always paid, but superannuation guarantee contributions may not be paid until the employee earns over the monthly minimum or quarterly maximum values.

Salary Sacrifice Scenarios

The following examples show how different salary sacrifice scenarios affect Employee Super Fund | Allowances tab settings.

Example 1

Employer pays 9.5% superannuation guarantee from $1 onwards.

Employee chooses to salary sacrifice 5% of their salary.

Employer does not subsequently adjust their contribution.

Employee Super Fund | Allowances tab:

Example 2

Employer pays 9.5% superannuation guarantee from $1 onwards.

Employee chooses to salary sacrifice 5% of their salary.

Employer then reduces their contribution to 4.5% to make up a total superannuation guarantee of 9.5% only.

Employee Super Fund | Allowances tab:

Example 3

Employer pays 9.5% superannuation guarantee and respects the minimum and maximum limits for contributions.

Employee chooses to salary sacrifice 5% of their salary.

Employer then reduces their contribution to 4.5% to make up a total superannuation guarantee of 9.5% only.

Employee Super Fund | Allowances tab:

Important: Exolvo does not compare salary sacrifice to other employer contribution values to derive RESC values. You must set up RESC and Influence fields correctly in Employee Super Fund because Exolvo does not perform any additional calculations to derive RESC values. For example, if you just set up Employer (%) = 9.5% and Salary Sacrifice = 9.5%, then Exolvo cannot determine the value of the employer’s superannuation guarantee commitment to the employee, and it cannot automatically derive the RESC value of the salary sacrifice. Similarly, if you enter a Salary Sacrifice ($) value, then Exolvo will not try to calculate the RESC portion of that value in relation to other superannuation guarantee payments.

Topic: 27204