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Understanding salary and super
Division A and E contributions are based on Ordinary Time Earnings (OTE), which does not include lump sum payments made on termination of employment in relation to accrued leave. Overtime is not included in OTE, except where overtime amounts cannot be distinctly identified and the hours actually worked will be included in ordinary hours of work. Scheme rules may require contributions to be made, even if the SG legislation provides an exemption. The checklist below demonstrates payment types that should generate a superannuation contribution.
Checklist OTE
| Payment type | Superannuation contribution required? |
|---|---|
| Allowances paid (other than a reimbursement of expenses.) | Yes |
| Reimbursement of expenses (e.g. travel or meal costs) | No |
| Bonuses - performance bonus, bonus labelled as ex-gratia, but in respect of ordinary hours of work | Yes |
| Bonuses – in respect of overtime only | No |
| Commission | Yes |
| Over award payments | Yes |
| Shift loading | Yes |
| Overtime | No |
| Casual loading | Yes |
| Benefits subject to fringe benefits tax | No |
| Workers compensation payments (including top up payments) | Yes |
| Top up payments (e.g. when serving on jury duty, with reserve forces, etc.) | No |
| Paid maternity / paternity / parental / adoption leave | Yes* |
| Paid annual / sick / long service leave | Yes # |
| Government (wage) subsides, e.g. jobs start allowance | Yes |
| Accrued annual leave, long service leave and sick leave paid as a lump sum on termination | No |
| Payments in lieu of notice | Yes |
| Redundancy payments | No |
| Other payments made by an employer under termination of employment | No |
| Non cash benefits (e.g. “private use” of an employer owned motor vehicle, employer provided childcare facilities). | Yes |
* No SG payment required under SG law however is included as a required payment under the NSW State Government Policy.
# Leave must actually be taken by the employee for superannuation contributions to be payable, not cashed out. For more information, refer to the Employer Handbook or go to the ATO website