Overview

The Superannuation tab contains Employee Super Funds makeup records. In New Zealand databases, it also contains the ESCT rate field.

The Superannuation tab records every fund that the employee has been attached to — whether contributions have been made or not. It displays a history of the employee's previous superannuation funds (Active = "No") and their current superannuation funds (Active = "Yes").

Important: You cannot delete Employee Super Funds records if any of the allowances or deductions attached to the associated Superannuation Fund record have been used in a closed pay.

ESCT rate (NZ)

In New Zealand, all employer contributions (except to defined benefit funds) are subject to ESCT. For the latest rates, visit the Inland Revenue website.

The ESCT rate threshold is based on the employee's earnings in the previous tax year. It is not a rolling 52-week average.

The default ESCT rate value for is 0.00, but leaving an employee with a zero rate will cause pay processing to fail.

New employees

When you create a new employee record, you need to manually enter an ESCT rate value based on the employee's expected income for the current tax year. For example, if the employee's annual salary will be $65,000, then you would enter 30.00. If you aren't sure what the employees annual salary will be IR expect the ESCT rate to be based on the income from their first pay in the new tax year (i.e. taxable gross + employer superannuation contributions), divide by number of days those earnings relate to, then multiplied by the remaining days in the new tax from the employees employment start date

Tax Year Rollovers

When you open the first standard pay for each pay period in the new tax year, PayGlobal automatically recalculates ESCT rates for employees in that pay period based in the employees income in the previous tax year.

• If no employee ESCT rates have changed, then the audit log will not list any employees.
• If any employee ESCT rates have changed, the audit log will show whether the new rate is based on a full year or a part year

  Limitation: For employees that started in the previous tax year PayGlobal does not calculate the ESCT rate as per IRD specifications/Income Tax Income Tax Act (2007) YA 1 Definitions. You will need to manually check/up the rate PayGlobal has calculated for these employees before closing the first standard pay of the new tax year.

• For employees that were employed for all of the previous tax year, their ESCT rate is based on:

  Gross for previous tax year * Number of pay periods (PTD records) in the year / Number of periods paid

  +

  Gross employer superannuation paid in previous tax year * Number of pay periods in the year / Number of periods paid

   

• For employees that started within the last tax year, their ESCT rate is based on:

  (Gross earning for the previous tax year * Number of pay periods in the the / Number of periods paid + (Gross employer superannuation paid * Number of pay periods in the year/Number of periods paid)

  However, the legislation requires these employees ESCT rates to be based on an estimate of what the employee is expected to be paid in the new tax year. The IR require you to do this by determining what the employee is expected to be paid (i.e. taxable gross income + employer superannuation contributions) within the first 14days of the new tax year, dividing by 14, then multiplying the total number of days in the tax year (i.e. usually * 365 unless its a leap year then * 366)

Resetting (removing) the first standard pay of the new tax year

PayGlobal does not roll back the ESCT rate changes it made when you opened the pay. You can run the Recalculate ESCT Rates command, but you should only use this tool to update employees who started before the start date of the previous tax year

Tab page order

The Superannuation tab is in the employee’s Payroll | Payroll area, but the default location depends on the country:

• Australia – Between the Accum (ii) and ETP tabs.
• NZ and Fiji – After the Accum tab.

See also

ESCT (NZ)

Employee Super Funds