Superannuation Guarantee on Ordinary Time Earnings (OTE) – What’s in and what’s out? Posted on September 18, 2020
![SG Guarantee SG Guarantee](https://adviceco.com.au/wp-content/uploads/sites/683/2020/09/SG-Guarantee-1024x576.png)
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% |