Salary Sacrifice

An Allowance/Deduction Classification (V - Salary Sacrifice % of Linked Earnings or Gross) has been provided to accommodate percentage-based pretax deductions for the salary sacrifice purposes. This is processed by the Preceda tax calculations in the same manner as Classification 3 - Before Tax Deductions or Classification V -Salary Sacrifice $ Amount.

As with the other percentage-based calculations (Classifications P and S), the earnings to include in the superannuation gross is determined by one of the following:

• A "Y" in the Include in Superannuation Gross  field on individual Hours Types and Allowances/Deductions options; or
• An associated Linked Earnings record identifying the Hours Types and Allowances/Deductions to include.

Linked Earnings records override the Include in Superannuation Gross field in the selected Hours Type and Allowance/Deduction window. However, the Include in Superannuation Gross field is used for any percentage-based Superannuation Allowance/Deduction with a Classification of P,S or V that does not have an associated Linked Earnings record.

 

To establish a Salary Sacrifice, you need to:

• Add a new Allowance/Deduction code with the new V Classification;
• Establish an associated Linked Earnings record; or
• Use the Include in Superannuation Gross field on the relevant Hours Types and Allowances/Deductions windows;
• Link the Allowance/Deduction code to the relevant employees in their Salary window.