Salary sacrifice allows employees to contribute a portion of their pre-tax income into their superannuation fund. As a Payroll Manager, you review these requests and manually configure the deductions within the payroll system to ensure accurate processing and compliance.
Process salary sacrifice requests from the EH Work app
When an employee submits a salary sacrifice request through the EH Work app, the system does not automatically apply these changes to their payroll profile. You must follow a manual setup workflow to action these requests.
The system sends a notification email to the nominated payroll administrator email address. This email serves as a formal request to either set up a new salary sacrifice agreement or cancel an existing one. Every request includes a start date, which is set at a minimum of seven days from the date the employee submitted the request.
Before proceeding with the setup, ensure the arrangement applies only to your employee's future earnings. A valid salary sacrifice agreement cannot include salary, wages, or entitlements already earned or accrued, such as existing annual or long service leave balances.
To action the request, manually create the salary sacrifice as a recurring pay run inclusion in the employee profile within the payroll system. Before you finish the setup, confirm with the customer whether the sacrifice is a one-off payment or a recurring deduction. Once you save it as a recurring inclusion, the deduction automatically appears in all future pay runs for that employee.
The payroll system allows for specific customisation per employee. You can override default percentages and dictate a specific salary sacrifice percentage if required. This includes managing arrangements such as capping salary sacrifice at a certain percentage or redirecting bonus payments into the salary sacrifice scheme.
Utilise the RESC deduction type for super payments
The Reportable Employer Super Contribution (RESC) deduction type assists in ensuring salary sacrifice super is reported correctly to the ATO. Using this specific system type prevents incorrect setup and reporting errors.
The system default 'Salary Sacrifice Super' category is automatically set with the RESC deduction type. You can identify these system-generated categories by the "SYSTEM" label displayed next to them. For these categories, specific fields such as the deduction name, type, and impact on SG calculations are locked and cannot be edited to maintain compliance.
Deduction categories using the RESC type are restricted to the 'paid to a super fund' payment option. If you have an existing recurring deduction using a Salary Sacrifice Super category but the payment option is set to manual or bank account, you must update the payment option to 'paid to a super fund' immediately. The system will display a warning and may prevent pay run finalisation until this is corrected.
Handle employee deductions in bulk
For organisations with a large number of employees, manually adding individual inclusions is not efficient. Use the bulk import feature to manage multiple deductions at once.
Navigate to the Payroll settings and go to the Data extracts page. Select Employee deductions as the data type and download the template. This file includes the necessary fields for Employee ID, Deduction Name, Deduction Type, Amount, and the start date.
Once you populate the template with the salary sacrifice data, navigate to the Import pay run inclusions page. Upload or drag the file into the system. After a successful import, the changes reflect in the Pay run inclusions section of the employee files. You can verify these updates by running an Employee Details Audit Report and filtering by Pay run inclusions.
Notify the employee of the request outcome
You must communicate directly with the employee to close the loop on a salary sacrifice request. The system does not record the request status directly against the employee profile or send an automated completion alert.
To notify the employee that the setup is complete, reply directly to the initial request email you received. If you reject a request, notify the employee via email within the seven day window before the requested start date. Save the request email and the updated payroll record as evidence of the transaction.