Payments for ordinary hours that are not OTE
Generally, payments in respect of ordinary hours are ordinary time earnings (OTE) and must be included when working out how much super guarantee (SG) to pay.
However, there are some payments in respect of the ordinary hours of work that aren't OTE. These payments are not included when calculating SG contributions.
Fringe benefits and OTE
A fringe benefit is like a payment to an employee, but in a different form to salary and wages.
Non-cash benefits are not OTE if they are:
- provided over and above salary and wages
- sacrificed from salary and wages.
These non-cash benefits are excluded salary and wages for SG purposes.
However, salary sacrifice contributions to superannuation are added to an employee's OTE if the amount being sacrificed would otherwise be OTE if it was instead paid to the employee.
Other workers
You may not need to pay SG on payments made in respect of ordinary hours of work in certain circumstances. These include payments made for employees under 18 years old, or for private and domestic workers, where the employee doesn't work more than 30 hours in a week.
Make sure you work out if you have to pay super.
Reimbursements to employees
Reimbursements are payments made to employees for actual expenses already incurred and are not OTE.
Example: reimbursement for actual expenses
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's not a reward for Fernando's services.
End of exampleOverpayments to employees
If you find that you have overpaid an employeeExternal Link, and the employee is required to repay the overpaid amount to you, the overpaid salary and wages are no longer OTE or salary or wages for SG purposes.
If you allow your employee extra time to repay the overpaid amounts, the law treats you as having made a loan to your employee:
- the loan amount is not subject to SG
- the loan amount is not
- a payment subject to withholding
- a payment in respect of the ordinary hours of work
- salary or wages
- reportable in STP
- no salary sacrifice can be deducted from the loan amount.
You must decide if the employee is required to repay the overpaid amount.