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Salary sacrificing

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Salary sacrifice super

If an employee wants to salary sacrifice part of their pay for superannuation, see Set up salary sacrifice superannuation.

In some industries and professions, items such as cars, phones and laptops can be salary sacrificed (sometimes called salary packaging).

The example we'll use below is a business which purchases a laptop computer for an employee. Repayments for the laptop are then deducted from the employee's pay until the laptop is paid in full.

Here's how you can handle this salary sacrifice arrangement in AccountRight:

  1. Allocate the purchase of the item being sacrificed to a Salary Sacrifice liability account.

  2. Set up a salary sacrifice deduction and link it to this account.

  3. Record the employee's pay with the salary sacrifice amount deducted from their pay. The amount offsets the payable liability account.
    If the salary sacrifice is "paying off" a purchased item, over time the salary sacrifice deducted from the employee's pay will provide a full reimbursement for the purchase of the item.

While this example might not apply to your scenario, the same approach can be used for any salary sacrifice arrangement (see the FAQs below for another scenario). If an employee simply needs to pay back an amount they owe you, see Wage advances and employee loans.

It might be a good idea to also get help from your accounting advisor to work through the specifics of your salary sacrifice or salary packaging arrangements.

Set up a salary sacrifice agreement

Start by creating a salary sacrifice liability account and a deduction category for each item being sacrificed.

Process the salary sacrifice transactions

In our scenario, the business purchases the laptop (recorded using a Spend Money transaction), then the repayments are sacrificed from the employee's pay.