A salary sacrifice that is not super salary sacrificing is also known as salary packaging or total remuneration packaging. You and your employer agree for you to receive less income before tax and in return your employer pays for certain benefits of similar value for you. This means you pay less tax on your income.
A salary sacrifice arrangement reduces your taxable income, meaning you may pay less tax on your income.
You should seek advice from your accountant before setting up a salary sacrifice deduction that is not Super in order to get the setup correct.
Also refer to: Salary sacrificing for employees | Australian Taxation Office.
Salary sacrifices and fringe benefit tax (FBT)
Some non-super salary sacrifices are considered as fringe benefits. For example:
Cars.
Goods.
Shares.
Payment of your expenses for loan repayments, school fees and childcare costs.
Other non-super salary sacrifices are exempt, so you will not have to pay FBT on them. For example:
A portable electronic device.
Computer software.
Protective clothing.
A briefcase.
A tool of trade.
Set up a Salary Sacrifice deduction code
Go to Setups, Payroll, Deductions, Maintain.
In the Deduction Code Details tab:
Enter a Deduction Code for the deduction.
Enter a Description.
Enter a Type (most likely Value).
Enter the Tax Status (Before or after tax).
Enter the Tax Certificate Code as 1 = Include in Tax Certificate Totals.
Select if it is Part of OTE.
Leave the Amount as 0.00 and Variable, as then you can enter different amounts required for each employee in their Standard Pay.
Select the Contribution Type Code as SS - Salary Sacrifice.
Select the Checkboxes:
Show YTD on Pay advice if required.
Multiple G/L Dissections if you want to be able to select multiple Cost Centres on the same Deduction Code.
Use Employee Other Accounts checkboxes if you will be paying the deduction into a designated bank account. Leave the other checkboxes blank.
Leave all other settings in the Deduction Code Details tab as they are.
In the Liability Account tab, enter the correct Liability Account in the General Ledger Posting Details task area.
If you selected Multiple G/L Dissections in step 4 above, the Multiple G/L Dissections tab will be enabled. You can enter the required Cost Centre(s) in here which will then make them available to be selected in timesheets, adjustments, and standard pays.
Click Accept(F9) to save the new code when finished.