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Are you paying too much super ?

Super is only applicable on OTE, there are a lot of payroll expenses that super should not be paid against (unless the award or the contract states so).

We have come across a few clients who have been paying super on leave loading over time. Even worse ones who pay on certain termination payment where the cost was in the thousands per transaction. The operators didnt know anybetter, the system was at fault, the CEO who signs it off, trusts and/or assumes the other employees know what they are doing and thus no room for errors. In most cases even your Auditor or you HR manager will not pick it up.

Please read the below which was taken from the ATO website for further info and or contact us for any specific payroll jobs. We specialise in our own payroll software or recommend you others that can tailor to your need.


Superannuation Guarantee (SG) Contributions Calculator

Amount that SG contributions are calculated on

Note: From 1 July 2008, employers must use ordinary time earnings (OTE) as defined in superannuation guarantee law to calculate the minimum superannuation guarantee contributions for their eligible employees. Ordinary time earnings are generally what employees earn for their ordinary hours of work.

An employee's ordinary hours of work may be stated in a statute, an industrial award or an agreement with the employer. If the ordinary hours of work are not specified or agreed, the ordinary hours of work will be the hours actually worked (not including overtime) and any hours of paid leave.

As a result, some employers will have to increase the level of contributions they make for some of their employees from 1 July 2008.

The minimum amount that SG contributions are calculated on for employees includes the following types of payments:

Salary or wages not including overtime (however if an employee has agreed to work a certain number of hours, those hours are the employee’s ordinary hours of work)

Allowances (other than a reimbursement of expenses)


Christmas bonuses (From 1 July 2009 only)

Payments in lieu of notice (From 1 July 2009 only)


Over-award payments

Shift loading

Casual loading

Workers compensation payments, including top-up payments, paid by the employer, where work is performed

Pay for annual holiday leave taken

Government (wage) subsidies (eg Wage Subsidy Scheme Allowance)

Pay for sick leave taken

Pay for long service leave taken

Director’s fees

Payments for performance in, or provision of services relating to entertainment, sport promotions, films, discs, tapes, TV or radio.

Payments to a contractor who is taken to be an employee under the Superannuation Guarantee (Administration) Act 1992

Salary or wages paid to former employees

The following types of payments are not included in the minimum amount that SG contributions are calculated on:


Reimbursement of expenses (eg travel costs)

Benefits subject to fringe benefits tax

Workers compensation payments (including top-up payments) where no work is performed

Payments when on jury duty, defence forces reserves leave or emergency services leave

Parental leave payments (includes maternity, paternity and adoption leave)

Annual leave loading

Accrued annual leave, long service leave and sick leave paid as a lump sum on termination

Redundancy payments

Other payments paid by an employer on termination of employment


Partnership and trust distributions

Payments for entering into a restraint of trade agreement

Payments for domestic or private work (not as part of a business) 30 hours or less per week


Kind Regards

Bendigo Accounting

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