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Edited version of your written advice
Authorisation Number: 1012806943564
Advice
Subject: Superannuation guarantee and ordinary time earnings
Question
Are earnings for work done on a Sunday, under the relevant award (the Award) considered OTE for the purposes of subsection 6(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA)?
Advice
No, please see the 'Reasons for decision'.
This advice applies for the following periods:
Year ending 30 June 2015
Year ending 30 June 2016
Year ending 30 June 2017
Year ending 30 June 2018
The arrangement commences on:
1 July 2014
Relevant facts and circumstances:
You employ workers under an award.
The award stipulates that work done on a Sunday is overtime and any hours worked on a Sunday are remunerated at a higher rate.
You engage a worker regularly on a Sunday.
Relevant legislative provisions
Superannuation Guarantee (Administration) Act 1992 (SGAA) subsection 6(1)
ATO View documents
Superannuation Guarantee Ruling SGR 2009/2 Superannuation guarantee: meaning of the terms 'ordinary time earnings' and 'salary or wages'
Reasons for decision
OTE is usually the amount an employee earns for their ordinary hours of work. It includes commissions, shift-loadings and some allowances, but does not include overtime payments.
The Commissioner's views on OTE are included in Superannuation Guarantee Ruling SGR 2009/2 Superannuation guarantee: meaning of the terms 'ordinary time earnings' and 'salary or wages'. (SGR 2009/2). Paragraph 12 of SGR 2009/2 provides the meaning of 'earnings', and paragraphs 13 to 18 of SGR 2009/2 outline the meaning of 'ordinary hours of work'.
Application of the law to your circumstances
There are no other formal or informal employment agreements between the employer and employee.
In this case the Award clearly outlines which hours are ordinary hours and which hours are considered overtime. Overtime hours are renumerated at a higher rate. Sundays fall outside of ordinary hours and an employee who is required to work on a Sunday must be remunerated at a higher rate.
As hours worked on a Sunday are described as overtime and, as per paragraph 14 of SGR 2009/2, distinguished from ordinary hours through a higher rate of remuneration, hours worked on Sundays are overtime.
As overtime is excluded from OTE under the SGAA, all remuneration paid in respect of Sunday hours are excluded from OTE, even where an employee might be rostered on to work on this day regularly.