You must use ordinary time earnings (OTE) to calculate the minimum super guarantee contributions required for your eligible employees. This ensures all eligible employees are treated the same way for super guarantee purposes.
Ordinary time earnings are generally what your employees earn for their ordinary hours of work, including:
- over-award payments
- certain bonuses
- commissions
- shift-loading
- certain allowances.
Termination payments for unused sick leave, unused annual leave or unused long service leave are excluded from OTE.
An 'employee's ordinary hours of work' are the hours specified as their ordinary hours of work under the relevant award or agreement, or under the combination of documents, that governs the employee's conditions of employment.
If the ordinary hours of work are not specified in a relevant award or agreement, the 'ordinary hours of work' are the normal, regular, usual or customary hours worked by the employee, as determined by all the circumstances of the case. This is not necessarily the minimum or maximum number of hours worked or required to be worked.
Where it is not possible or practicable to determine the normal, regular, usual or customary hours of work of an employee, the actual hours worked by the employee are taken to be their ordinary hours of work.
If an employee's OTE is greater than the maximum contribution base for the quarter, the employee's OTE is limited to the maximum contribution base.
Overtime payments
Payments for work performed during hours outside an employee's ordinary hours of work are not OTE. This applies even if the:
- payments are calculated at an hourly rate
- employee gets a specific loading
- payments are calculated as an annualised or lump sum component of a total salary package that is expressly referable to overtime hours as remuneration for overtime hours worked.
However, if overtime amounts cannot be distinctly identified, the hours actually worked will be included in ordinary hours of work.
Last Modified: Monday, 9 July 2012