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RandomQuest(Initiate)Initiate
17 Feb 2025

We have employees who are employed under an award where they work 40 hours per week and bank 4 hours per week as an RDO accrual so they are paid for 36 hours. The award states that their ordinary hours are 36 hours.


My questions are:

  1. For the calculation of OTE for superannuation purposes do we work on 36 hours or 40 hours?
  2. When they subsequently take the RDO's do we pay superannuation on this?
  3. If they have a balance of unused RDO's that are paid out on termination is superannuation paid on this, or is it considered part of their ETP?
  4. If they are paid an hourly site allowance based on hours worked, when calculating the OTE for superannuation purposes do we base this on 40 hours of site allowance or 36 hours?

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5 replies
1,134 views
5 replies

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PayrollDeanne(Taxicorn)Taxicorn
ATO Certified Response17 Feb 2025

Hiya @RandomQuest 👋


RDOs are just the initial "flexibility" of ordinary hours. In your case, it's 36 hours. Because it's work "without pay" for 4 hours here to take those 4 hours as a paid absence then.


  1. OTE is a payment in respect of ordinary hours of work, so that is 36 hours paid hours.
  2. Yes, because they are paid for the absence. In the period of an RDO taken, they are still paid 36 hours.
  3. As per ATO guidance, unused RDO on termination is an ETP, no super.
  4. Why would you pay 40 hours of site allowance when they are paid for 36 ordinary hours? I assume you pay 36 hours site allowance as you pay 36 hours of ordinary pay. It's an all-purpose allowance that is OTE.

Deanne

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Most helpful replyATO Certified Response

PayrollDeanne(Taxicorn)Taxicorn
ATO Certified Response17 Feb 2025

Hiya @RandomQuest 👋


RDOs are just the initial "flexibility" of ordinary hours. In your case, it's 36 hours. Because it's work "without pay" for 4 hours here to take those 4 hours as a paid absence then.


  1. OTE is a payment in respect of ordinary hours of work, so that is 36 hours paid hours.
  2. Yes, because they are paid for the absence. In the period of an RDO taken, they are still paid 36 hours.
  3. As per ATO guidance, unused RDO on termination is an ETP, no super.
  4. Why would you pay 40 hours of site allowance when they are paid for 36 ordinary hours? I assume you pay 36 hours site allowance as you pay 36 hours of ordinary pay. It's an all-purpose allowance that is OTE.

Deanne

RandomQuest(Initiate)Initiate
18 Feb 2025

Hi


Thanks for the reply.


Re Point 4 the award states that we have to pay the site allowance on all hours worked. Hence if they work for example 45 hours in a week (which would be 40 hours ordinary, of which 4 hours would be banked as RDO, and 5 hours of overtime) we would pay 45 hours of site allowance. The question is how many of those hours get included in the OTE calculation for superannuation purposes - based on your reply I am thinking 36 hours. So our total for OTE purposes would be 36 hours ordinary and 36 hours of Site Allowance - would you agree?

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