Income
Income Sources
The Income section allows you to record the client's various income sources, including Salary, Other Taxable and Non Taxable sources.
The Income screen is made up of two panels:
- Existing Income - Here all the income sources within this scenario are recorded, along with the Create New income button to add a new income source. Incomes can be open and edited by clicking on the relevant row, income can also be deleted by using the garbage bin icon to the right of the row. AND
- Year to Date Data - This panel records year to date taxable income, tax, pension amounts along with previous financial year losses.
Adding a New Income
To add a new income source click the CREATE NEW INCOME button.
Upon clicking the CREATE NEW INCOME button the Add Income Source page will be displayed.
Select the Income Type from the drop down menu. Sources to choose from include:
- Salary (which incorporates automatic superannuation guarantee contributions)
- Taxable - Paid Monthly and Annually (incorporating automatic superannuation guarantee contributions) (Note: Annually paid taxable income is an amount that is received in one lump sum, such as bonuses, and the income tax calculation is based on this higher amount being received in one lump sum).
- Tax Free - Paid Monthly and Annually (No Tax and no automatic superannuation guarantee contributions)
- Centrelink
- Other Monthly Income (no SGC) - good for Self-Employed people who may not receive superannuation guarantee contributions regularly or at all.
- Family Court - a Family Court awarded amount (such as family maintenance payments)
- DB Taxable (CPI) - Defined Benefit Pension Payments (taxable, and increase with CPI)
- Salary (non-indexed) - a salary income which you do not want indexed with the standard AWOTE rate.
After selecting an income source click NEXT.
The following screen displayed is the Income Details Screen. Ensure all fields with REQ next to the title are completed.
Click ADD when completed to save the details.
Once you click the ADD button, you will be able to scroll down to see some further entry fields in relation to additional concessional (pre-tax) superannuation contributions (both salary sacrifice and additional employer), and Salary packaging details (as shown in the below screenshot)
Associated Super Contributions (Taxed in Fund)
Under this heading you can include any salary sacrifice contributions, along with Employer Additional contributions (if the employer contributes more than the regulated level of superannuation guarantee contributions).
1. Salary Sacrifice contributions (a specified amount)
* Select "Salary Sacrifice" from the dropdown menu
* Enter either the amount per annum, OR the percentage of salary per annum
* Set the applicable start and end date for the salary sacrifice contributions
* Select the Fund that the contributions will be paid into
* Click "UPDATE" to save the data entry
2. Salary Sacrifice - Max This Year Cap
This setting allows you to maximise the salary sacrifice contributions up to the maximum concessional cap in the applicable years
* Select "Salary Sacrifice - Max This Year Cap" from the dropdown menu
* DO NOT set an amount or a percentage (Prospera will calculate that for you)
* Set the applicable start and end dates for the contributions
* Select the Fund that the contributions will be paid into
* Click "UPDATE" to save the data entry
3. Salary Sacrifice - Max Available Cap
This setting allows you to maximise the concessional contributions, utilising any unused contributions carried forward
* Select "Salary Sacrifice - Max Available Cap" from the dropdown menu
* DO NOT set an amount or a percentage (Prospera will calculate that for you)
* Set the applicable start and end dates for the contributions
* Select the Fund that the contributions will be paid into
* Click "UPDATE" to save the data entry
4. Employer Additional contributions
If an employer contributes more than the legislated Superannuation Guarantee Contribution (SGC) rate, enter the amount ABOVE the regular superannuation guarantee contributions that the employer is contributing
* Select "Employer Additional" from the dropdown menu
* Enter either the amount per annum, OR the percentage of salary per annum
* Set the applicable start and end dates for the contributions
* Select the Fund that the contributions will be paid into
* Click "UPDATE" to save the data entry
Salary Sacrifice - Motor Vehicle
Under this heading is where you can include details of motor vehicles leases, or any other salary packaging that you wish to include.
With a motor vehicle lease, you need to include the pre-tax Annual Amount, and, if there is a portion which would attract FBT (a post-tax amount), that amount should be included in the ECM Amount (employee contribution method) section, which is usually an after-tax amount that is paid towards the lease.
* Enter an appropriate name for the salary sacrifice
* Enter the Annual Amount OR Annual Rate (percentage of salary) that is being sacrificed (i.e. pre-tax amount)
* Enter the ECM Annual Amount (the post-tax annual amount) if applicable
* Select "Yes" under the heading "Keep?" (see note ** below)
* Click "UPDATE" to save the data entry
** "Keep" simply means do you want to keep the data entry. If you have entered a Lease, but it is not longer applicable, select "No", and click "Update" and the entry will be removed.
These figures will be shown on the client's payslip.
If a Motor Vehicle Salary Sacrifice is not to remain applicable to the salary end date, you will need to enter a second "salary" income without the motor vehicle salary sacrifice.
Salary Sacrifice - Public Benevolent Institution
Public Benevolent Institution is where you would include salary sacrifice contributions which require the return of the cash flow, for modelling purposes. An example of this would be salary sacrifice into a home mortgage, or electricity, which we see fairly regularly with Health Department / Hospital employees.
* Enter an appropriate name for the salary sacrifice
* Enter the Annual Amount that is being sacrificed
* Enter the Benefit Annual Amount (the amount that is being paid into the relevant item - in this case, the home mortgage)
* Select "Yes" under the heading "Keep?" (see note ** below)
* Click "UPDATE" to save the data entry
** "Keep" simply means do you want to keep the data entry. If you have entered a Lease, but it is no longer applicable, select "No", and click "Update" and the entry will be removed.
These figures will be shown on the client's payslip.
Next Article: Expenses and Goals
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