The Superannuation Guarantee amount has increased from 9% of OTE (Ordinary Time Earnings) to 9.25% from 1/7/2013.

This creates clear obligations on all employers to review their current systems and contributions to ensure that they are complying. However, as we explored in last weeks HR Highlight, within the operation of employment law there are several definitions of Ordinary. ACAPMA reminds members to familiarise themselves with the operation of the term Ordinary in the Fair Work Act, the NES, Modern Awards and Superannuation. It is the latter that we will deal with this week.

The operation of Superannuation is governed by the Australian Tax Office and SG Ruling 2009/2. This Ruling outlines what is included and excluded from the definition of Ordinary in reference to Superannuation.

For the purposes of calculating Superannuation the definition of OTE is as follows…

OTE Includes:

  • Base Rate as per Award or other instrument
  • Over Award Payments
  • Shift Loading
  • Allowances relating to an employees work (such as the Dangerous Goods Allowance for regular Dangerous Goods Drivers)
  • Loadings relating to an employees work structure (such as Casual Loading for casual employees)
  • Bonuses that apply based on the employees hours of work (includes Christmas bonuses)
  • Commission Payments
  • Paid Leave
  • Holiday Pay
  • Lump sum of unpaid leave/wages in arrears while still working
  • Payments in lieu of notice
  • Some workers compensation (when working only)

OTE Does NOT Include:

  • Overtime
  • Lump sum unused sick, annual or long service leave
  • Paid parental leave
  • Leave loading
  • Fringe benefits
  • Some workers compensation (when not working)
  • Redundancy Payments
  • Unfair Dismissal Payments
  • Expense based allowances meal allowance, reimbursement etc

The Ruling also makes it clear that if any individual contract of employment provides for more inclusions, or a more favourable outcome for the employee, then that more favourable definition will prevail over the Ruling.

Here to Help

ACAPMA members are reminded that the ACAPMAlliance Workplace Relations Professionals are available to assist with all employment matters including Superannuation. For more information just call 1300 160 270.

HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by calling 1300 160 270 and speaking to one of the ACAPMA Workplace Relations Professionals its free for members. ACAPMA membership is affordable at only $550 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts. Click here to learn more about ACAPMA membership.

Elisha Radwanowski BCom (HRM & IR)
ACAPMA Workplace Services Manager