Ordinary Times Earnings
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All Superannuation Guarantee (SG) contributions must be calculated based on Ordinary Time Earnings (OTE).
There is a ‘maximum earnings base’ that applies so that if the employee’s OTE is greater than the maximum earnings base for the quarter, super contributions only have to be made based the maximum earnings base (e.g the lesser of the employee’s OTE and the maximum earnings base applies).
The maximum quarterly earnings base for 2011/2012 is $43,820. This is indexed annually.
The following table provides a guide for working out which type of payments make up OTE.
|
Ordinary time earnings (OTE) |
Not Ordinary time earnings (OTE) |
|
Allowances paid (other than expense allowances expected to be fully expended or reimbursements) |
Accrued annual leave, long service leave and sick leave paid as lump sum on termination |
|
Casual loading |
Annual leave loading |
|
Commission |
Benefits subject to FBT (fringe benefits tax) |
|
Directors' fees |
Bonuses that relate solely to non-ordinary hours effort |
|
Government wage subsidies (e.g. Jobstart) |
Maternity/paternity leave payments |
|
Other Bonuses (e.g. Christmas bonuses, ex-gratia bonus, performance bonus ) |
Other payments made by an employer on termination of employment |
|
Over-award payments |
Overtime (except where no ordinary hours are stipulated) |
|
Annual leave payments (except loading) |
Redundancy payments |
|
Long Service Leave payments |
Reimbursement of expenses (e.g. travel costs) |
|
Workers compensation payments (including top-up payments), where work is performed |
Top-up payments (e.g. when serving on jury duty or with Reserve payments) |
|
Payments to a contractor who is an employee under Superannuation Guarantee Administration Act 1992 (labour portion only) |
Workers compensation payments including top-up payments when no work is performed |
|
Shift loading |
|
|
Pay for sick leave taken |
|
|
Payments in lieu of notice |
|
Please note that this information is only a guide. For more information, visit www.ato.gov.au or speak to your financial adviser.
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