The reporting of salary sacrifice under STP2 has changed compared to STP1. From a processing perspective, salary sacrifice to super is unchanged. However, changes may be required to the manner in which some non-super salary sacrifice items, otherwise known as salary sacrifice other are processed.
The concept of salary sacrifice reporting in STP2 is that the source of the salary sacrifice is grossed back up to its pre-sacrificed value and the salary sacrifice is reported separately.
The key change that is required when processing salary sacrifice other for reporting under STP2 is that the sacrifice is now processed as deduction, rather than a negative earning item.
The following example looks at the pre-STP2 and post-STP2 methods of processing a salary sacrifice for an exempt benefit, such as a portable electronic device. It is important to note that if an employee is salary sacrificing in instalments (as this example shows the full benefit being provided and the sacrifice occuring via 12 instalments) and transcending financial years that their pay profile will need to be adjusted prior to processing pays for the 2022/23 financial year.
Prior to STP2 we would process a negative amount to an earning pay item to represent the salary sacrifice. This would serve the purpose of reducing gross earnings and therefore tax whilst leaving superannuation calculations at the same level had the salary sacrifice not occurred.
