Thursday, 15 March 2012

How to journal superannuation contributions

I have a question how to record this transaction into journal, hopefully you will be able to sort it out.

If an employee has a gross wages $4000.00 and tax withheld $1000.00 as well as the company pay 11% of super which is 440.00 then I will make a journal will be :

Salary 4000.00
Super   440.00
Payg liability        1000.00
Cash (to super)    440.00
Cash (to Staff)     3000.00

However my question is if an employee will contribute extra $300.00 to her super and will be deducted from her salary, is it call salary sacrifice? and how to make the journal to this transactions?
as information :

Staff will receive $ 2700.00 ($3000.00 – $300.00)  because she sacrifice her salary $300.00 into super then she receive her salary less.

How to make the final journal? I tried to make it but there is gap $300.00 and I dont know how to allocate it.

Many thanks


1 comment:

  1. Hi Hani

    Your answer to the first scenario is correct.

    For the second scenario, if the employee is making the super contribution out of gross salary, it is Salary Sacrifice. If it is made out of the net amount of the salary, it would be classified as Personal Contribution.

    Please note that if you are using MYOB or other accounting software, Salary Sac (Deduction) will be automatically counted as part of the Superannuation Expense and the amount will also be automatically deducted from Salary account once you set up the link properly. You might not be able to see such an account on your current company’s accounts list.

    Good luck in your work role