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Warning: This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
From 1 July 2008, you must use ordinary time earnings, as defined in the super guarantee law, to calculate super guarantee contributions for your employees. This ensures all employees are treated the same for super guarantee purposes.
Ordinary time earnings are generally what employees earn for their ordinary hours of work, including:
- over-award payments
- commissions
- shift allowances, and
- paid leave.
Ordinary time earnings does not include overtime.
This means from 1 July 2008, you cannot use an earnings base to calculate your super guarantee contributions which is based on:
- an industrial award
- an existing employment agreement
- a fund’s trust deed, or
- a law of the Commonwealth, States or Territories.
What do you need to do?
- Check to see if you’re using an earnings base other than ordinary time earnings to calculate your super contributions. If the amount you pay is less than the minimum 9%, you will have to increase this amount to meet the minimum to avoid the super guarantee charge.
- Think about building the increased super guarantee contributions into your workplace bargaining processes and payroll system now to be ready for 1 July 2008.
- Start using ordinary time earnings for all your employees from 1 July 2008.
Last Modified: Monday, 17 September 2007
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