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Is leave loading payment superable

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may
Newbie

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I am getting conflicting information regarding whether super is payble when paying annual leave loading.  Please help. Thanks

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ATO Certified

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Replies 1

Hi @may,

 

Welcome to our Community!

 

Generally speaking, Ordinary time earnings (OTE) are what employees earn for their ordinary hours of work. The employer is required to pay super on OTE once the earnings are actually paid to the employee.

Not all payments that form part of salary or wages form part of OTE. Whilst an annual leave payment forms part of OTE (for current employees on leave), the treatment of the annual leave ‘loading’ can be a little bit more complex.

 

Under the Super Guarantee legislation (SGR 2009/2) an annual leave loading is not considered OTE if it relates to a notional loss of opportunity to work overtime. If there are sufficient facts to establish that the purpose of the annual leave ‘loading’ is not for overtime related reasons, it can be considered OTE.

 

We can provide you with general information here, but if you'd like more detail around your personal situation you can write to us to request a private ruling. Private rulings are written advice on how we think tax and super law applies to your circumstances. It's a free service, and we usual provide a response within 28 days. Please remember to include information about your award and any industrial agreements you have in place with your employer when you send us your application.

 

Hope this helps.

 

 

2 REPLIES

Best answer

ATO Certified

Community Support

Replies 1

Hi @may,

 

Welcome to our Community!

 

Generally speaking, Ordinary time earnings (OTE) are what employees earn for their ordinary hours of work. The employer is required to pay super on OTE once the earnings are actually paid to the employee.

Not all payments that form part of salary or wages form part of OTE. Whilst an annual leave payment forms part of OTE (for current employees on leave), the treatment of the annual leave ‘loading’ can be a little bit more complex.

 

Under the Super Guarantee legislation (SGR 2009/2) an annual leave loading is not considered OTE if it relates to a notional loss of opportunity to work overtime. If there are sufficient facts to establish that the purpose of the annual leave ‘loading’ is not for overtime related reasons, it can be considered OTE.

 

We can provide you with general information here, but if you'd like more detail around your personal situation you can write to us to request a private ruling. Private rulings are written advice on how we think tax and super law applies to your circumstances. It's a free service, and we usual provide a response within 28 days. Please remember to include information about your award and any industrial agreements you have in place with your employer when you send us your application.

 

Hope this helps.

 

 

may
Newbie

Replies 0

Hi Jodie,

 

Thanks for the clarifiction. appreciated.

 

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