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Superannuation Guarantee on Ordinary Time Earnings (OTE) – What’s in and what’s out? Posted on September 18, 2020

SG Guarantee

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 …

PaymentSalary or wagesOrdinary 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 ratesYesNo
Overtime hours – agreement prevails over awardYesNo
No ordinary hours of work stipulatedYes – all hours workedYes – all hours worked
Casual employee: shift loadingsYesYes
Casual employee: overtime paymentsYesNo
Casual employee whose hours are paid at overtime rates due to a ‘bandwidth’ clauseYesNo
Piece-rates – no ordinary hours of work stipulateYesYes
Overtime component of earnings based on hourly-driving-rate method stipulated in awardYesNo
Allowance by way of unconditional extra paymentYesYes
Expense allowance expected to be fully expendedNoNo
Danger allowanceYesYes
Retention allowanceYesYes
Hourly on-call allowance in relation to ordinary hours of work for doctorsYesYes
Petty CashNoNo
Reimbursement of travel costsNoNo
Payments for unfair dismissalNoNo
Workers’ compensation: returned to workYesYes
Workers’ compensation: not workingNoNo
Annual leaveYesYes
Annual leave loading – demonstrably referable to a loss of opportunity to work overtimeYesNo
Annual leave loading – all otherYesYes
Sick leaveYesYes
Parental leave – eg maternity leave, paternity leave, adoption leaveNoNo
Ancillary leave – eg jury dutyNoNo
Termination payments
Termination payments: in lieu of noticeYesYes
Termination payments: unused annual leave, long service leave or sick leaveYesNo
Performance bonusYesYes
Bonus labelled as ex-gratia in respect of ordinary hours of workYesYes
Christmas bonusYesYes
Bonus in respect of overtime onlyYesNo

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 YearSuper Guarantee
1 July 2018 – 30 June 20199.5%
1 July 2019 – 30 June 20209.5%
1 July 2020 – 30 June 20219.5%
1 July 2021 – 30 June 202210%
1 July 2022 – 30 June 202310.5%
1 July 2023 – 30 June 202411%
1 July 2024 – 30 June 202511.5%
1 July 2025 – 30 June 202612%

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talk to us Discover the difference that the right advice can make

Get in touch with our team today and learn how you and your business can grow to the next level. From structuring to sustainability, we'll help you reach your financial goals and live the lifestyle you deserve.

be better off.