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Re: Additional Pay Item

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TJC
Newbie

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Replies 4

Hi

We have an employee full time, above award, annual salary IT based role.

He has been granted an additional pay amount on top of his normal wage if he does chargable onsite work.

Just trying to assertain what type of payment this would be classed as and if it would attract superannuation?

 

It is based on % rate of on site charge to client.

 

Thank you 

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MVF
Devotee

Replies 1

Hi @TJC

 

Its interesting to hear that your UK based head office has used the term "bonus", which as you said probably doesnt apply here in Australia given the circumstances.

 

If we take a look at one of a number of ATO definition we come to the conclusion that the payment for Australian taxation and super purposes is a "Commission",  ... quote .. 

 

Commissions

Commissions are typically payments made as recognition of performance or service, and may be calculated as a percentage of the proceeds from a particular transaction or series of transactions.

 

Bonuses and similar payments

A bonus is usually made to an employee in recognition of performance or services, and may be calculated as a percentage of the proceeds from a particular business transaction. These payments may not necessarily be related to a particular period of work.

A payment will be treated as similar to a bonus if it is of a one-off nature that does not relate to work performed in a particular period. Examples include:

  • a once-only payment made to a payee as compensation for a changed work location
  • an amount paid as a sign-on bonus to a payee entering a workplace agreement
  • any lump sum allowance.

 

As the commissions are earnt by the employee during their normal hours of duty they are considered to be OTE for Super Guarantee purposes.   Refer SGR 2009/2  para 23.

 

Even if you adhered to the "bonus" classification as per your UK head office, the payments are still OTE for Super Guarantee purposes.   Refer SGR 2009/2  para 28.

 

Either way, as the employee earns this additiional income during their normal hours of duty, both Commissions and Bonuses are OTE.

 

More information on super guaranteed can be found on the ATO website here

 

ATO super line 13 10 20

 

 

 

 

4 REPLIES

MVF
Devotee

Replies 3

Hi @TJC

 

Does the award that covers this employee state what this payment is classified as ???

 

From what you are stating it seems to be a commission .... but I want to make sure before a response is provided.

TJC
Newbie

Replies 2

I cannot find anything about it in their award Professional Employees Award 2010

 

I was thinking along the same lines but they have called it a bonus on his paperwork. Our head office is UK based so they arent familar with our legisilation.

Highlighted

Best answer

MVF
Devotee

Replies 1

Hi @TJC

 

Its interesting to hear that your UK based head office has used the term "bonus", which as you said probably doesnt apply here in Australia given the circumstances.

 

If we take a look at one of a number of ATO definition we come to the conclusion that the payment for Australian taxation and super purposes is a "Commission",  ... quote .. 

 

Commissions

Commissions are typically payments made as recognition of performance or service, and may be calculated as a percentage of the proceeds from a particular transaction or series of transactions.

 

Bonuses and similar payments

A bonus is usually made to an employee in recognition of performance or services, and may be calculated as a percentage of the proceeds from a particular business transaction. These payments may not necessarily be related to a particular period of work.

A payment will be treated as similar to a bonus if it is of a one-off nature that does not relate to work performed in a particular period. Examples include:

  • a once-only payment made to a payee as compensation for a changed work location
  • an amount paid as a sign-on bonus to a payee entering a workplace agreement
  • any lump sum allowance.

 

As the commissions are earnt by the employee during their normal hours of duty they are considered to be OTE for Super Guarantee purposes.   Refer SGR 2009/2  para 23.

 

Even if you adhered to the "bonus" classification as per your UK head office, the payments are still OTE for Super Guarantee purposes.   Refer SGR 2009/2  para 28.

 

Either way, as the employee earns this additiional income during their normal hours of duty, both Commissions and Bonuses are OTE.

 

More information on super guaranteed can be found on the ATO website here

 

ATO super line 13 10 20

 

 

 

 

TJC
Newbie

Replies 0

Thank  you!

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