Super on Paid parental leave

 Author: PayrollDeanne(Taxicorn)Taxicorn

11 July 2024

Hiya @Ann4 👋

That's not a yes/no question! Let me explain the layers:

Superannuation Guarantee (Administration) Act 1992 defines the minimum SG obligations. Payments that are included in the legislated ordinary time earnings (OTE) are the minimum. These are outlined in the ATO SGR 2009/2. Paragraph 34 defines the payments you make for paid parental leave are not S&W and not OTE, so no super is payable:

• 34. However, payments made while a worker is on paid parental leave or other kinds of ancillary leave are not OTE as these types of leave payments are excluded from being 'salary or wages' in the SGAA by section 12 of the Superannuation Guarantee (Administration) Regulations 2018 (SGAR): see paragraph 59B of this Ruling.

Industrial Instruments - such as Modern Awards or State/Federal Awards, Agreements, contracts or policies may stipulate additional SG obligations that are in addition to the SGAA 1992 obligations. For example, MA000004 General Retail Industry Award 2020 Clause 20.5 Absence from work states:

• Subject to the governing rules of the relevant superannuation fund, the employer must also make the superannuation contributions provided for in clause 20.2 and pay the amount authorised under clause 20.3(a) or 20.3(b):
  • (a)         Paid leave—while the employee is on any paid leave;
  • (b)        Work-related injury or illness—for the period of absence from work (subject to a maximum of 52 weeks) of the employee due to work-related injury or work-related illness provided that:
    • (i)           the employee is receiving workers compensation payments or is receiving regular payments directly from the employer in accordance with the statutory requirements; and
    • (ii)         the employee remains employed by the employer.

This means an employer of an employee covered by this award must pay SG for the paid parental leave. In your example, you would be obliged to pay SG on the $500.

Deanne