Understanding RESC in IPA Books+

Legacy KB ID: 5553

Question

Why do super amounts ticked with the option RESC exempt still appear in the RESC field on the INB payment summary?

How does RESC works in IPA Books+? I have ticked the RESC exempt option for the employee but it is still reported in RESC field in INB payment summary, why?

Answer

If the Super item is of a type Super Guarantee or Collective agreement, and you are allowed to exempt the amount from RESC, tick the option >Stat Rate RESC exempt.

If the super Item is of a non-Statutory type like Salary Sacrifice, Employer Additional, and you are allowed to exempt the amount from RESC, tick the option RESC Exempt.

Warning: Exemptions from RESC reporting is governed by strict rules so you should verify with your accountant whether an exemption is permissible in your circumstance.

The Issue:

IPA Books+ allows the user to create a super of few different types such as SG (Super Guarantee), EA (Employer Additional), P (Productivity), CA (Collective Agreement), SS (Salary Sacrifice), MV (Member Voluntary), and SD (Spouse Deduction).

Of these Super types not all are applicable for RESC. The Super items that may require reporting to RESC on the Payment Summary are SG, SS , EA and CA, and depending on circumstances.

Super Items like Productivity, Member Voluntary and Spouse deduction are not reportable and will not be added to the RESC field.

When considering whether the amount should or should not appear in RESC you should check what super type is being used and whether it is adding or not adding to RESC correctly. Please refer to your accountant for further guidance.

The Employee Card offers two types of RESC exemption:

· RESC exempt

· >Stat rate RESC exempt.

These two options have their own significance use and are dependent to the Super item used. See the table below for the proper use of these types to correctly exclude them from RESC in the Payment Summary.

Super item

Option to Tick

SG (Super Guarantee)

>Stat rate RESC exempt

CA (Collective Agreement),

>Stat Rate RESC exempt

EA (Employer Additional)

RESC exempt

SS (Salary Sacrifice)

RESC exempt

Below are some of the demonstrated scenario of how the different Super items are treated for the RESC:

Scenario 1: Super Guarantee

  1. Setup Super Guarantee (SG) item at 12%, (higher than statutory rate of 9.5%)
  2. Tick the option RESC exempt for the employee,
  3. Process the pay.
  4. Check the payment summary.
  5. Notice the amount is showing in RESC field in Payment summary.

The amount greater than the statutory rate ($28, the difference between 9.5% and 12%) is reported in the RESC field. This is because the SG super type is coded to report any amount above the statutory rate to the RESC field. The selection of RESC Exempt has no impact.

Scenario 2: Super Guarantee

  1. Go back to employee card and untick the RESC exempt, for the SG super
  2. Process another pay.
  3. RESC is added the $28 (now total 56).

Explanation: again the super item is of SG type, so it is irrespective of RESC exempt option. 

Scenario 3: Super Guarantee

  1. Go back to the employee card
  2. Use the same Super Guarantee item from 1 and this time tick the option >stat rate RESC Exempt.
  3. Process a payrun,
  4. Check the payment summary.
  5. Notice this time it is not reported on RESC, in the payment summary.

The RESC exempt option works only where the Super type is coded to allow an optional exemption.

The >Stat Rate RESC exempt option works for those Super types that were initially coded not to allow a RESC exemption.

Where the Business has decided without input from the Employee to pay a Super Guarantee (SG) contribution greater than the statutory rate (eg 12% instead of the currently prevailing 9.5%) then you must use the >Stat Rate RESC exempt option to avoid the additional amount appearing in the RESC field fo the INB Payment Summary.

Scenario 4: Collective agreement

  1. Create the new super item as Collective agreement type.
  2. set the super as 12% and tick RESC exempt.
  3. Process the pay.
  4. Check the payment summary
  5. Notice, RESC is reported.

Scenario 5: Collective agreement

  1. Continue from Scenario 4, but tick >Stat Rate RESC exempt this time.
  2. Check the Payment summary
  3. Notice It did not add the amount to RESC.

Scenario 6: Employer Additional

  1. Create new Super Item 'EA 12 pct' as employer additional.
  2. Use this item for employee and tick RESC exempt.
  3. Process a pay.
  4. Check the payment summary.
  5. Notice RESC is not reported as expected.

Scenario 7: Employer Additional

  1. Continue from scenario 6
  2. Now Untick the RESC Exempt in employee
  3. Process a pay.
  4. Check the payment summary.
  5. Notice RESC shows the amount. RESC in INB reports the total super amount, not just the difference.

Scenario 8:Employer Additional

  1. Continue from Scenario 7.
  2. Change the EA to 20% in employee card.
  3. RESC Exempt is ticked.
  4. Process a pay.
  5. Check the payment summary
  6. Notice the RESC not reported for this pay.

Conclusion:

If the Super item is created as Super Guarantee or Collective agreement, and you will like to exempt the amount from RESC you will have to select it as>Stat Rate RESC exempt option

If the super Item is created as non-Statutory type like Salary Sacrifice, Employer Additional, you will have to tick RESC Exempt option to be able to calculate RESC in the INB payment summary.

Need more help?

Ask the Reckon Community at: https://community.reckon.com/reckon  

How did we do?

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