Hi
My company wants to offer an employee the option to salary sacrifice to purchase a laptop.
We do not wish to trigger any FBT requirements.
Can you please let me know what would be the best way to get this set up in XERO?
Thank you
Hiya @Summer2024 👋
I'm a bit confused by your question, as the heading is one thing, then the body of your question is about the business process in your payroll product. I can't help you with how to use your payroll product. 😉
However, let me focus on the heading of your question.
It's easy to get confused between the different types of taxes! For FBT purposes, the benefit may be excluded for FRINGE BENEFIT TAX purposes. All good there.
But now we move to reporting income. You report the pre-sacrifice amount as Gross in STP2, then you report the amounts that were sacrificed to either superannuation or other employee benefits, regardless of what those things may be assessed as for FBT purposes. This isn't about FBT, it's about income now. In this case, there would not be any RFBA reported on this item.
When it comes to the amounts that are included in the parent period totals amount (W1), then the ATO STP2 employer guidance defines which payment types to include and which ones not to include (scroll down to the second table).
Seek assistance from your payroll product provider about how to do that in their product.
Deanne
Hiya @Summer2024 👋
I'm a bit confused by your question, as the heading is one thing, then the body of your question is about the business process in your payroll product. I can't help you with how to use your payroll product. 😉
However, let me focus on the heading of your question.
It's easy to get confused between the different types of taxes! For FBT purposes, the benefit may be excluded for FRINGE BENEFIT TAX purposes. All good there.
But now we move to reporting income. You report the pre-sacrifice amount as Gross in STP2, then you report the amounts that were sacrificed to either superannuation or other employee benefits, regardless of what those things may be assessed as for FBT purposes. This isn't about FBT, it's about income now. In this case, there would not be any RFBA reported on this item.
When it comes to the amounts that are included in the parent period totals amount (W1), then the ATO STP2 employer guidance defines which payment types to include and which ones not to include (scroll down to the second table).
Seek assistance from your payroll product provider about how to do that in their product.
Deanne
Hi Deanne
Thank you so much for your response.
I am sorry my question wasn't very clear. I am trying to figure out whether the salary sacrifice for the laptop needs to be included in W1 or not.
The table in the link above says to deduct salary sacrifice. I am confused because we include any salary sacrifice for super in W1, so I thought laptops will be treated the same.
At the moment I have them set up to be included in W1, doesn't reduce super guarantee but reduces PAYG. Is that correct?
Thanks again!
Let me give you an example, @Summer2024, it's easier to understand. Let's say the contract of employment commits to annual salary of 65,000 per year. Let's say the value of the laptop is 5,000, therefore the "taxable gross" is 60,000.
You report as follows:
Deanne
1,486 views
3 replies