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OAA Member Assist has found that some members are paying too much superannuation for their employees. Here is a check-list of payments to employees that do or do not attract the superannuation guarantee contribution.
OAA Member Assist has found that some members are paying too much superannuation for their employees. Here is a check-list of payments to employees that do or do not attract the superannuation guarantee contribution.
The following payments DO attract superannuation contributions
- Allowances other than a reimbursement of expenses
- Bonuses
- Christmas bonuses
- Payments in lieu of notice
- Commission
- Over-award payments
- Shift loading
- Casual loading
- Salary or wages (not including irregular overtime). If an employee has agreed to work a certain number of hours, those hours are the employee’s ordinary hours of work. Fair Work Act 2009 (Cth) National Employment Standards defines a full-time employee as someone who is engaged to work an average of 38 hours. Many employees work 40 hours as their ordinary hours; superannuation contributions are payable on 40 hours not 38 hours.
- Workers compensation payments, including top-up payments, paid by the employer, where work is performed. That is when an employee is on a light duties plan or similar as part of a return to work plan.
- Pay for annual holiday leave; personal/carer’s leave or long service leave taken
- Government (wage) subsidies, for example, payments received under the Wage Subsidy Scheme Allowance
- Director’s fees
- Payments for performance in, or provision of services relating to entertainment, sport promotions, films, discs, tapes, television or radio.
- Payments to a contractor who is taken to be an employee under the Superannuation Guarantee (Administration) Act 1992 (Cth). Ask OAA Member Assist if you are unsure.
- Salary or wages paid to former employees
The following types of payments DO NOT attract superannuation contributions
- Irregular overtime
- Reimbursement of expenses such as 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, including maternity, paternity and adoption leave
- Annual leave loading
- Accrued annual leave, long service leave and personal leave if paid as a lump sum on termination
- Redundancy payments
- Other payments paid by an employer on termination of employment
- Dividends
- 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—of 30 hours or less per week
OAA Member Assist recommends that employers undertake an audit of how superannuation contributions are currently paid to their employees to ensure they are not exceeding their payment requirements.
How can we assist you?
OAA Member Assist is available at any time to answer any employment questions or to discuss conducting a HR/IR Compliance Audit of your business. Call us on the OAA Member Assist national toll free number 1300 101 391 or visit our website at www.irgroup.com.au for a complete list of our services and to send an online enquiry.
All information provided is general advice only. Contact your accountant or the ATO if you have specific superannuation or taxation related enquiries.