Why is the Superannuation for an employee not calculating correctly?

KB264

Overview

There are many reasons why the superannuation may not be calculating correctly on an employee’s pay. Firstly, you will need to have an understanding of the superannuation rules and how they apply to your payroll. Secondly, you need to be familiar with payroll and the way it is setup – the incorrect setup of superannuation will cause incorrect calculations when you process a pay run.

You can find the current superannuation requirements on the ATO website.

It is vital that the superannuation items are set up correctly as Accentis uses this data to calculate the superannuation. If you have found that superannuation is calculating incorrectly, you should check that you have set the following up correctly.

Is your employee eligible for superannuation?

Have you entered the correct rate? You can check the current rate on the ATO website.

This is the minimum amount that must be earned before tax in a calendar month before superannuation is calculated on the employees pay. You can find the current legislative requirements on the ATO website.

This is the monthly limit that Superannuation is calculated on. Superannuation will not be calculated on eligible earnings over the limit threshold.

You can check the current maximum contribution base on the ATO website. The rate should be adjusted from quarterly to monthly before it is entered into Accentis.

The maximum monthly limit is used to calculate across the full quarter, not just the month.

Check that all superannuation eligible pay items are correctly setup with the Calculate employer SG superannuation on this pay item box ticked.

Below is a list of common issues. It is assumed that your payroll has been set-up correctly based on the current legislation and the rules above.

Superannuation is not generally required to be paid until an employee has reached the minimum threshold which is currently $450 before tax per calendar month. Accentis will not start calculating superannuation until the employee has reached the minimum you have set. Once an employee has passed the minimum threshold, Accentis will calculate the superannuation on the employee’s total income for the month.

The example below shows that over the first 2 weeks of the calendar month, employees A and B both earned the same amount of income and superannuation, however, the superannuation was calculated differently based on the individual weeks pays.

Example

Week 1 of the calendar month

  • Employee A earns $400 before tax – Superannuation calculated at $0
  • Employee B earns $500 before tax - Superannuation calculated at $47.50

Week 2 of calendar month

  • Employee A earns $400 before tax – Superannuation calculated at $76.00
  • Employee B earns $300 before tax – Superannuation calculated at $28.50

Accentis calculates superannuation based on the amount an employee has earned over the calendar month. When processing a pay run, Accentis will look at all the previous pays for the month, calculate the superannuation based on the full month of eligible income, subtract the superannuation that has been accrued over the previous pays and adjust the current pay run to reflect the superannuation entitlement for the month.

Sometimes a manual adjustment may need to be made, perhaps for an incorrect calculation in a previous month. It is recommended that any manual adjustments are made at the final pay for the calendar month. If the adjustment is made at any other time throughout the month, then Accentis will try to adjust the subsequent pays to the correct amount of superannuation for that calendar month.

Superannuation is not calculated on any eligible income over the maximum monthly limit set for your employee and adjusted across the full quarter. If superannuation is calculating above the maximum threshold, make sure you have correctly entered the “Only up to $” amount on the employee’s form. Check if the employee is still under the threshold for the quarter. If they have exceeded the threshold for the quarter and superannuation is still calculating, please contact support.

The maximum monthly limit is used to calculate across the full quarter, not just the month.

Check the employees form to make sure the Eligible for superannuation box is unticked in the superannuation tab.

This was set as monthly to keep it consistent with the minimum amount earned in a month. However, the maximum contribution base is assessed over the full quarter, not just the month.

Check the superannuation tab on the employees form to make sure the correct amount has been added to the “only for eligible payments over $” field. If this is set up correctly, ask the following question:

Is this the first pay of the month?

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Last edit 18/12/20