Superannuation Guarantee on Ordinary Time Earnings (OTE) – What’s in and what’s out? Posted on September 18, 2020
Should you pay superannuation on Christmas bonuses? What about sick leave or termination payments?
What counts as superannuation on ordinary time earnings (OTE) can cause employers to slip-up, and mistakes can be costly. This checklist will help you to stay between the lines …
| Payment | Salary or wages | Ordinary time earnings (OTE) |
|---|---|---|
| Awards and agreements | ||
| Overtime hours – award stipulates ordinary hours to be worked and employee works additional hours for which they are paid overtime rates | Yes | No |
| Overtime hours – agreement prevails over award | Yes | No |
| No ordinary hours of work stipulated | Yes – all hours worked | Yes – all hours worked |
| Casual employee: shift loadings | Yes | Yes |
| Casual employee: overtime payments | Yes | No |
| Casual employee whose hours are paid at overtime rates due to a ‘bandwidth’ clause | Yes | No |
| Piece-rates – no ordinary hours of work stipulate | Yes | Yes |
| Overtime component of earnings based on hourly-driving-rate method stipulated in award | Yes | No |
| Allowances | ||
| Allowance by way of unconditional extra payment | Yes | Yes |
| Expense allowance expected to be fully expended | No | No |
| Danger allowance | Yes | Yes |
| Retention allowance | Yes | Yes |
| Hourly on-call allowance in relation to ordinary hours of work for doctors | Yes | Yes |
| Expenses | ||
| Reimbursement | No | No |
| Petty Cash | No | No |
| Reimbursement of travel costs | No | No |
| Payments for unfair dismissal | No | No |
| Workers’ compensation: returned to work | Yes | Yes |
| Workers’ compensation: not working | No | No |
| Leave | ||
| Annual leave | Yes | Yes |
| Annual leave loading – demonstrably referable to a loss of opportunity to work overtime | Yes | No |
| Annual leave loading – all other | Yes | Yes |
| Sick leave | Yes | Yes |
| Parental leave – eg maternity leave, paternity leave, adoption leave | No | No |
| Ancillary leave – eg jury duty | No | No |
| Termination payments | ||
| Termination payments: in lieu of notice | Yes | Yes |
| Termination payments: unused annual leave, long service leave or sick leave | Yes | No |
| Bonuses | ||
| Performance bonus | Yes | Yes |
| Bonus labelled as ex-gratia in respect of ordinary hours of work | Yes | Yes |
| Christmas bonus | Yes | Yes |
| Bonus in respect of overtime only | Yes | No |
The government’s amnesty on superannuation guarantee ended on 7 September, and employers now face fees and penalties for any late or unpaid superannuation to an employee.
Also, don’t forget that the SG rate is scheduled to increase to 10% from July 2021 and then progressively increase to 12% by July 2025, as outlined in the table below.
| Financial Year | Super Guarantee |
|---|---|
| 1 July 2018 – 30 June 2019 | 9.5% |
| 1 July 2019 – 30 June 2020 | 9.5% |
| 1 July 2020 – 30 June 2021 | 9.5% |
| 1 July 2021 – 30 June 2022 | 10% |
| 1 July 2022 – 30 June 2023 | 10.5% |
| 1 July 2023 – 30 June 2024 | 11% |
| 1 July 2024 – 30 June 2025 | 11.5% |
| 1 July 2025 – 30 June 2026 | 12% |
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