Super Guarantee Changes
10.06.08
As you are aware, you are required to provide a minimum level of superannuation support for an employee - currently 9% of the employee’s notional earnings base.
In working out an employee’s notional earnings base, from 1 July 2008, you will now be required to make sure all your employees’ Super Guarantee contributions are calculated using ordinary time earnings.
What are ‘ordinary time earnings’?
Ordinary time earnings (OTE) is generally what your employees earn for their ordinary hours of work, including:
- salary and wages
- over-award payments
- commissions
- shift allowances
- paid leave.
However, it excludes things like overtime.
Do I need to check current arrangements?
Most employers tend to use OTE to calculate their employees super contributions.
To be safe, however, you should check your current Super Guarantee arrangements now to see if you are using an earnings base other than OTE.
Make sure you are using OTE to calculate your employees Super Guarantee contributions if you are relying on an earnings base contained in:
- an industrial award
- an existing employment agreement
- a fund’s trust deed, or
- a law of the Commonwealth, States or Territories.
WARNING !
From 1 July 2008, if the super contribution percentage in a specific earnings base for your employees is below the minimum 9%, you will have to pay extra to meet the minimum 9% to avoid additional Super Guarantee charges.
