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  • List of payments that are ordinary time earnings

    This page shows which payments to employees are counted as ordinary time earnings (OTE), and which are counted as salary and wages for super guarantee purposes.

    As an employer, you use:

    • OTE to work out the minimum super guarantee contribution for your employees. OTE is the amount you pay employees for their ordinary hours of work, including things like commissions and shift loadings.
    • salary and wages to work out the super guarantee charge. You only need to do this if you missed paying the minimum super guarantee contribution by the due date. Salary and wages are similar to OTE but also includes any overtime payments.

    On this page

    Overtime

    Payment

    Salary or wages

    OTE

    Overtime hours over and above the ordinary hours stated in an award or agreement (see example)

    Yes

    No

    Overtime where the ordinary hours of work are not stated in an award or agreement, or not separated from other hours (see example)

    Yes – all hours worked

    Yes – all hours worked

    Casual work, piece work and commissions

    Payment

    Salary or wages

    OTE

    Casual employee shift loadings

    Yes

    Yes

    Casual employee overtime payments

    Yes

    No

    Piece-rates – no ordinary hours of work stated (see example)

    Yes

    Yes

    Commission

    Yes

    Yes

    Allowances

    Payment

    Salary or wages

    OTE

    Allowance by way of unconditional extra payment (for example, the employee has complete discretion on whether to spend the allowance)

    Yes

    Yes

    Expense allowance expected to be used in full (see example)

    No

    No

    Danger or site allowance (these are OTE unless they are intended to offset particular expenses)

    Yes

    Yes

    Retention allowance

    Yes

    Yes

    On-call allowance outside ordinary hours of work

    No

    No

    Hourly on-call allowance for ordinary hours of work for doctors

    Yes

    Yes

    Expenses

    Payment

    Salary or wages

    OTE

    Reimbursement of expenses, including travel costs (see example)

    No

    No

    Payment for unfair dismissal

    No

    No

    Workers' compensation – returned to work

    Yes

    Yes

    Workers' compensation – not working

    No

    No

    Bonuses

    Payment

    Salary or wages

    OTE

    Performance bonus

    Yes

    Yes

    Christmas bonus

    Yes

    Yes

    Bonus in respect of overtime only

    Yes

    No

    Leave

    Payment

    Salary and wages

    OTE

    Annual leave

    Yes

    Yes

    Annual leave loading – clearly linked to lost opportunity to work overtime

    Yes

    No

    Annual leave loading – all other

    Yes

    Yes

    Sick leave

    Yes

    Yes

    Parental leave – eg maternity leave, paternity leave, adoption leave

    No

    No

    Ancillary leave – eg jury duty, defence reserve service

    No

    No

    Long service leave

    Yes

    Yes

    Termination payments

    Payment

    Salary and wages

    OTE

    Termination payments – in lieu of notice

    Yes

    Yes

    Termination payments – unused annual leave, long service leave or sick leave

    Yes

    No

    Examples

    Example: overtime identified in award or agreement

    Ennio is employed under a collective agreement that incorporates terms from an award. If there's inconsistency between the agreement and the award, the agreement prevails.

    Under the award, the ordinary hours of work are 38 hours per week and the employer can require an employee to work reasonable overtime. However, the agreement provides for a shift roster in which employees work an average of 44 hours per week. The shift roster identifies the ordinary hours of work as 40 hours, with the additional four hours paid at a penalty rate.

    The payment to Ennio for his 40 ordinary hours of work is OTE. The 4 hours of overtime payments are not OTE.

    The payment for all 44 hours is salary or wages because it is a reward for his services.

    End of example

     

    Example: ordinary hours of work not stated

    Kim works in a call centre. Under her contract she works a minimum number of hours per week. She also works extra shifts when needed, though there is no clear pattern to this.

    There is no award or agreement that specifies Kim's ordinary hours of work, and she is not paid overtime rates for her extra shifts.

    All of Kim's wages are OTE. As there are no stipulated ordinary hours of work, and no pattern of regular or usual hours, Kim's ordinary hours of work are all the hours she actually works.

    All the payments to Kim are also salary or wages.

    End of example

     

    Example: piece-rates where no ordinary hours stated

    Evan works as a fruit picker for Green Apples Ltd. He is paid 15 cents for every kilogram of apples he picks. There are no ordinary hours specified in any award or agreement.

    Evan picks 5,000 kilograms of apples in his working hours in the week and is paid $750 by Green Apples Ltd.

    The $750 paid to Evan is OTE. As his ordinary hours of work are not specified in any award or agreement, his ordinary hours of work are the hours that he actually works.

    The $750 paid to Evan is also salary or wages.

    End of example

     

    Example: expense allowance expected to be used in full

    Matteo is a salesman. In addition to his usual salary, he is paid $300 per month to cover expenses he is expected to incur while visiting clients, such as travel and mobile phone expenses. It is expected that Matteo will use the whole allowance in the course of visiting clients.

    The $300 allowance is not OTE or salary or wages because it is not a reward for Matteo's services.

    End of example

     

    Example: reimbursement

    Fernando travels by train on behalf of his employer and pays for the train ticket himself. He provides a receipt to his employer for the $14.50 cost of the train ticket, and the employer reimburses him $14.50.

    The payment is not OTE or salary and wages, because it is not a reward for Fernando's services.

    End of example
    Last modified: 26 May 2021QC 33860