Superannuation (or super) is a compulsory system in Australia requiring employers to pay eligible employees per month a super guarantee (or SG) in addition to their wages. For information about exceptions to employer's requirement to pay SG, see https://www.ato.gov.au/Business/super-for-employers/work-out-if-you-have-to-pay-super/.
SG is a minimum percentage of employee income that is placed into a scheme (or fund) to support an employee's financial needs in retirement, requiring employers to contribute a percentage of the base pay for eligible employees into one of the following fund types:
- Default fund: A fund set up by the employer used as the default super fund for employees.
- Non-default fund: A non-default fund can be a fund regulated by the Australian Prudential Regulation Authority (APRA) or a retirement savings account (RSA) chosen by the employee.
- Self-managed super fund (SMSF): A fund that allows employees to self-manage their superannuation funds in terms of investing and reporting to the Australian Taxation Office (ATO) at the end of the year.
For information about the Australian Tax Office and information on superannuation, see https://www.ato.gov.au/Individuals/Super/
For information about the Australian Prudential Regulation Authority, see https://www.apra.gov.au/. This site also contains information on RSA providers.
The two main types of superannuation contributions in Dayforce are employer super contributions and employee salary sacrifice, which are described as follows:
- Employer super contributions: The minimum amount that an employer must pay each quarter for each eligible employee is called the super guarantee (SG), which is a mandated percentage of each employee's ordinary time earnings (OTE). You can see the government mandated SG percentage at the Australian Tax Office website https://www.ato.gov.au/super/. Note that some Enterprise Bargain Agreements (EBAs) require the employer to contribute more towards superannuation. Employer super contributions can be made to default, non-default, and SMSF funds. Employer super contributions are processed in Dayforce as memo deductions and are tax free at the time of contribution.
- Employee salary sacrifice: An employee can choose to contribute additional funds towards their superannuation through salary sacrifice. This is usually a deduction on employee gross pay.
Both employer and employee contributions can be paid to one or more superannuation funds, depending on what the employee wants.
As part of their onboarding in Dayforce, Australian employees complete a Superannuation Standard Choice form. In this form, employees can decide which Superannuation fund receives their super contributions. Some employees might be required to select a default fund through their EBAs. If an employee does not nominate a fund, then the employer organization contributes the funds to its default fund. For more information about the Superannuation Standard Choice form, see "Superannuation Standard Choice Form" in the Self Service Guide. A corresponding record is automatically added to the Payroll > Superannuation screen when the Superannuation Standard Choice form is submitted and processed.
Employers use establishments called superannuation clearing houses to disburse employee and employer contributions to the superannuation schemes. When you commit a pay run, Dayforce generates a SuperStream Alternative File Format (SAFF) file that contains the contribution details and forwards it to the clearing house. Dayforce generates the SAFF file for all employees with committed effective pay periods.
For managed pay clients, payroll administrators can generate a SAFF file without requiring Dayforce to pick up the SAFF file sender details from System Admin > Client Properties if an HR record isn’t found. The SAFF file has the sender details information preconfigured when you select Payroll Admin in the Contact Type drop-down list in the Contacts tab of System Admin > Client Properties.
There are a number of configuration processes that you must complete to set up your organisation to calculate and disburse superannuation in Dayforce.
- Set up the third-party payee for your organisation's default superannuation scheme.
- Set up the third party payee for non-default superannuation schemes.
- Configure the appropriate payroll policies with the Apply AUS Superannuation Rule.
- Configure non-default superannuation deductions (either rates higher than the default percentage or a different superannuation fund chosen by the employee), which includes additional configurations:
- Configure employee salary sacrifice deductions.
- Set up and attach the employer’s deductions (overridden rate/own choice of fund/employee salary sacrifice) to the employee's payroll elections.
- Set up and attach the employee’s deductions (overridden rate/own choice of fund/employee salary sacrifice) to the employee's payroll elections.
- Configure onboarding to include the Superannuation Standard Choice form for employees to select a superannuation fund.
- Alternatively, enter superannuation choices for employees in the People feature, in the Payroll > Superannuation screen.
Override Employer Superannuation
You can override or pay an additional employer superannuation amount for employees when processing Australian payroll. Dayforce displays the amount that you indicate for the employer superannuation as an override amount to the actual employer superannuation on the employee payslip as well as the SAFF and STP reports when you commit a pay run.
The Replace column in the Quick Entry screen of Payroll > Pay Run Management or Payroll > Data Entry indicates whether to increase or decrease the calculated tax for the employer superannuation amount. If the Replace column is set to Yes, the amount entered will replace the calculated tax amount. If the Replace column is set to No, the amount specified will be paid in addition to the calculated tax amount.
The screenshot below displays the following examples:
- In example A, the employer superannuation amount will be calculated as $200.00 on employee pay slips.
- In example B, the employer superannuation amount will be calculated as employer super + $200.00 on employee pay slips.
Additionally, when there are multiple employer funds in the Superannuation screen for an employee, then the override will be applied to the first fund in the list. For example, where an employee is enrolled to fund Y (5%) and fund Z (4.5%), and the payroll administrator overrides or replaces $400 for the superannuation, then the override functionality will take into account fund Y only. The result on the pay slip will look like:
Memo section
Super – fund Y $400.
In this scenario, the fund Z will be zero for that pay run. The same will be passed on to the SAFF (super stream alternative file format) file.
To override an employer superannuation amount:
- Go to Payroll > Pay Run Management or Payroll > Data Entry and click the Quick Entry tab.
- Select the checkbox in the Replace column.
- In the Code drop-down list, click one of the following options:
- Superannuation Employer: For default superannuation funds.
- Superannuation Non Default Self Managed: For non-default funds and self-managed superannuation funds.
- Enter an amount in the Amount field. The amount that you enter replaces the calculated tax amount.