Understanding the Payroll Method of Superannuation Management
In 2005, the ATO introduced new legislation regarding superannuation processing. To comply with these requirements, and to provide users with a more automated method for processing superannuation data, these programs and reports were created:
Fund Master program (P07845).
Group Fund Setup program (P07850).
Employee Fund Allocation program (P07855).
DBA Transaction with Fund Information report (R07845).
Employee Fund Allocation report (R07855).
These programs enable you to enter funds into the system, specify which funds are required or frequently used, enroll employees in funds, specify fund allocations, and create superannuation payments during the payroll cycle.
In addition, starting July 2014, ATO introduced the SuperStream standard as a part of the government's Super Reform package. This standard of superannuation provides customers a consistent and reliable method of transacting linked data and payments for superannuation electronically. The introduction of the programs to work with the SuperStream standard in the JD Edwards EnterpriseOne payroll method of superannuation provides you with an efficient superannuation system that helps you to improve the timeliness of processing of contributions, and to reduce the number of lost accounts and unclaimed monies.
You need to report the superannuation data in eXtensible Business Reporting Language (XBRL) and transmit to the various funds via web services. ATO has defined specifications for reporting contributions via XBRL in the Standard Business Reporting (SBR) project.
With SBR, you can directly submit reports from business accounting or the payroll software. As per SBR, you can have only one fund per XBRL file and transmission. However, there can be hundreds of such funds associated with your business. Due to the complexity in the creation and transmission of the huge amount of messages, you are expected to use a third party clearing house that takes care of the distribution of data and contribution thereof to each individual fund. The clearing houses accept a single report and payment from the employers in the SuperStream Alternate File Format (SAFF) comma separated value (CSV) file as specified by ATO. It then transforms the data to XBRL format and transmits to the respective funds. The JD Edwards EnterpriseOne software enables you to generate the superannuation data in CSV file with .txt extension. You need to change the file extension to .csv. If you are using the JD Edwards EnterpriseOne Accounts Payable system, the system retrieves the payment reference number from the Accounts Payable - Matching Document table (F0413) and displays it in the Payment/Customer Reference Number field on the data file. Otherwise, the system displays the payment reference number based on the Payment Reference Number processing option setting. This unique number helps the fund to reconcile the payment when it reaches their end.
To comply with the new superannuation SuperStream standard requirements, the Fund Master program (P07845), the Employee Fund Allocation program (P07855), and the DBA Transaction with Fund Information report (R07845) were modified, and these programs were created:
Superannuation DBAs and Funds report (R75A0745).
Superannuation XML Extract report (R75A0350).
To set up and use the payroll method of superannuation management, you must complete these steps:
Enter fund administrators into the address book.
When you enter funds into the system, you must enter the fund provider or trustee. For example, if you want to enter a fund that is administered by Australia Investments, you must first enter Australia Investments into the address book. You then enter the address book number for Australia Investments when you enter the fund into the system.
Activate accounts payable vouchering.
To generate payments to fund administrators automatically during the payroll cycle, you must activate accounts payable vouchering. If you do not use the JD Edwards EnterpriseOne Accounts Payable system, you can manually create payments for the fund administrators using the data on the DBA Transaction with Fund Information report (R07845).
Create superannuation benefits and deductions and assign them to employees.
You can create as many benefits and deductions as necessary; however, you can associate only one superannuation benefit and one superannuation deduction with each employee. The system calculates the deductions, benefits, and accruals (DBAs) during payroll and uses the fund allocation information that you enter to determine how much of the calculated DBA amount to contribute to each fund.
To comply with Australia Taxing Office (ATO) regulations, users must specify whether a deduction or a benefit is a superannuation contribution.
Superannuation information prints on the employees' PAYG payment summary form. To ensure that amounts are printed correctly, you must enter a value of S1 in the Aust. Tax Reporting field on the Tax Instructions – Australia and New Zealand form for all superannuation deductions and benefits.
Enter superannuation DBAs in UDC (07/FD).
You must add to UDC (07/FD) each DBA that calculates superannuation contributions. The system looks for fund allocation data only for DBAs that are set up in this UDC table. If you do not enter the DBA in this table, the DBA still calculates during the payroll cycle, but the system does not prorate the DBA amount to each fund that is set up for the employee.
You must also define the special handling code for the DBAs calculating superannuation contributions to define the type of contribution. Valid values are:
UDC Value
Corresponding Column in Data File
Guarantee
Superannuation Guarantee Amount
Personal
Personal Contributions Amount
Award
Award or Productivity Amount
Salary Sac
Salary Sacrificed Amount
Voluntary
Voluntary Amount
Spouse
Spouse Contributions Amount
Child
Child Contributions Amount
Other
Other Third Party Contributions Amount
Enter funds into the system.
Using the Fund Master program you enter a record for each fund that is available to the employees.
Create fund groups.
Using the Group Fund Setup program, you can specify whether a fund is available for a specified group of employees. You can also specify whether the fund is required. You can make funds available to all employees, or to employees with specific home business unit, union, or job type and step combinations. For example, if a union requires that employers make superannuation contributions to a specific fund, you can create a fund group for that union and specify that the particular fund is required. During fund enrollment, the system automatically displays the fund for all employees in the specified union, which simplifies the enrollment process.
Enroll employees in funds.
After you set up DBAs, funds, and fund groups, you can enroll employees in superannuation funds. When you enroll employees in funds, you can specify start and stop dates, allocation percentages, and fund membership numbers. You can also select the SuperStream Registration check box if you want the Membership Registration data to be included in the SAFF data file. You can enroll employees in employer benefit funds and in employee deduction funds. The system uses the fund allocation data that you enter during enrollment to prorate the calculated DBA amount across all funds in which the employee is currently enrolled.
Review superannuation DBAs and funds.
Run the Superannuation DBAs and Funds report (R75A0745) to review the superannuation history for employees. You run this report to review superannuation details after running pre-payroll and before running the final payroll update. The report retrieves data from the F0709 and F07845 tables and displays total of amounts by employee and the grand total of the amounts for the period for which you run the report. The F0709 table holds data until you run the payroll and after you run the payroll, the system moves the data from F0709 to F0719. To review data after payroll, you need to run the DBA Transaction with Fund Information report (R07845).
Process payroll and create payment advices and vouchers.
After you enroll employees in superannuation funds, you can process them through the payroll cycle. The system calculates the superannuation DBAs that are associated with the employee and prorates the calculated amount across all funds in which the employee is currently enrolled. You then print payment advices using the Generic Payment Advice for Australia and New Zealand program. The system prints all required superannuation data on the payment advice.
If you are using JD Edwards EnterpriseOne Accounts Payable, the system also produces vouchers during the payroll cycle, which automatically generate payments from the Accounts Payable system.
See Setting Processing Options for Generic Payment Advice for Australia and New Zealand (R75A0013).