Superannuation Guarantee GL Journals

This topic provides an overview of the processes involved in generating Superannuation Guarantee (SG) General Ledger journals from MYOB Exo Payroll.

Payroll Operation Processes

The generation and ongoing management of Superannuation Guarantee (SG) journals have been strictly based on the following payroll operation process:

1. Update the Standard Pay

2. Open the Current Pay

3. Print any Standard Reports

4. Pay any Direct Credits

5. Generate GL export files

6. Update the Current Pay

The system is designed to post SG journals for each pay run, as this updates an internal flag within the system to note that Superannuation Guarantee amounts have been generated and posted to a General Ledger file.

Apply Superannuation Guarantee Scheme Global Settings

A global setting that enforces the use of the Superannuation Guarantee minimum liable earnings threshold is available at Superannuation Setup > Superannuation Guarantee in the Payroll Setup window. Selecting this option activates the Apply Superannuation Guarantee Scheme option in all areas of the system, providing consistency within the Exo Payroll application.

The minimum monthly earnings threshold is set on a per-Superannuation basis by configuring the Minimum Earnings Base property on the Superannuation Maintenance window. The default threshold is $450 per month.

The maximum quarterly earnings threshold is set on a per-Superannuation basis by configuring the Maximum Earnings Base property on the Superannuation Maintenance window. No maximum threshold is set by default.

How the System Works

The calculation of the Superannuation Guarantee employer contribution for employees must take into consideration the employees' Gross liable earnings in order to be correct.

For each employee, MYOB Exo Payroll takes into account:

• The month-to-date earnings liability total, to check if it is equal to or greater than the Superannuation Guarantee minimum threshold (the default threshold is $450 per month).

• The quarterly earnings liability total of each employee, to check if it is equal to or less than the Superannuation Guarantee maximum threshold (no maximum threshold is set by default).

If an employee's Gross earnings liability falls between the two thresholds, the necessary Superannuation Guarantee journals are generated for the employee. If the Gross earnings liability falls outside the thresholds, then no Superannuation Guarantee journals are generated for the employee.

Calculation Date

Superannuation Guarantee contributions can be calculated according to the Pay Period End Date or the Physical Pay Date. Prior to the release of MYOB Exo Payroll 2011.04, all sites used the Pay Period End Date. As of Exo Payroll 2011.04, the following dates are used:

• New installations of Exo Payroll 2011.04 or later are set to use the Physical Pay Date.

• Existing installations prior to Exo Payroll 2011.04 use the Pay Period End Date.

• Existing installations that are upgraded to Exo Payroll 2011.04 or later continue to use the Pay Period End Date by default. For existing installations, a utility is available to change the system to use the Physical Pay Date and to recalculate historical SG amounts using the Physical Pay Date. Contact your Enterprise Solution Partner for more information.

In many cases, it will not make a difference whether the Pay Period End Date or the Physical Pay Date is used; however, there are some situations where it can affect the calculations.

For example, consider a scenario where pay is (physically) made on a Wednesday each week, but the pay period covers pay in advance for the Thursday and Friday:

Using the Physical Pay Date, August would include five weekly pays and September would include four weekly pays.

Using the Pay Period End Date, August would include four weekly pays and September would include five weekly pays.

Example

The Demonstration Company has several employees, all of which belong to a weekly pay run. All employees of this company receive the standard Superannuation Guarantee employer contribution. The system uses the Physical Pay Date for SG contributions, and is configured to use the default SG threshold of $450.

Below are the standard pay details for the employees:

Week 1 Pay Run

At the start of the month, only one employee, Sandra Smith, is immediately eligible for the Superannuation Guarantee employer contribution as her month to date earnings are above the $450 threshold.

As month-to-date liable earnings for George Russel and Thomas Andrews are below the $450 threshold, they are both not-eligible to receive the Superannuation Guarantee employer contribution at this stage.

Generated SG Journals Week 1 Pay Run

The above journals are reflected when printing the General Ledger report.

Once all required reports and payslips have been processed, it is then advised to create the Direct Credit files and GL posting file.

Week 2 Pay Run

This pay sees George Russel qualify for the SG employer contribution. The system automatically generates a current journal and a back-dated journal for the required SG amounts, in this case Week 2 & Week 1 respectively. Sandra Smith will continue to receive the SG contribution, while Thomas Andrews has still not reached the month-to-date $450 threshold and hence does not receive any SG contribution amount.

Generated SG Journals Week 2 Pay Run

The above journals are reflected when printing the General Ledger report.

Once all required reports and payslips have been processed, it is then advised to create the Direct Credit files and GL posting file.

Week 3 Pay Run

This pay sees Thomas Andrews qualify for the SG employer contribution. The system will automatically generate a journal for the current pay SG amounts and then create two back-dated journals for the required SG amounts for Week 1 and Week 2.

Sandra Smith and George Russel will both continue to receive the SG contribution for the respective period.

Generated SG Journals Week 3 Pay Run

The above journals are reflected when printing the General Ledger report.

Once all required reports and payslips have been processed, it is then advised to create the Direct Credit files and GL posting file.

Week 4 Pay Run

This pay now sees all employees receive the SG amounts in the current pay; no back dated journals are required.

Generated SG Journals Week 4 Pay Run

The above journals are reflected when printing the General Ledger report.

Once all required reports and payslips have been processed, it is then advised to create the Direct Credit files and GL posting file.

Week 5 Pay Run

This pay sees all employees receive the SG amounts in the current pay; no back dated journals are required.

Generated SG Journals Week 5Pay Run

The above journals are reflected when printing the General Ledger report.

Once all required reports and payslips have been processed, it is then advised to create the Direct Credit files and GL posting file.

Total Monthly Summary