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Superannuation on payments in Lieu of Notice (more than minimum 4 weeks notice)

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Newbie

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When employee work through the 4 weeks notice period (as per the employment agreement), and

there is also a payment in lieu of addditonal 4 weeks notice paid with a 4 weeks redundancy payment and a severance payment as part of a genuine redundancy - 

 

Q: does employer have to pay super on the in liue of addtional 4 weeks notice? 

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ATO Certified

Devotee Registered Tax Practitioner

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ATO guidance: 

 https://www.ato.gov.au/business/super-for-employers/how-much-to-pay/checklist--salary-or-wages-and-o...

 

   Payment                                                                                                            Salary or wages                      Ordinary time earnings (OTE)

Termination payments:    in lieu of noticeTermination payments                                 Yes                                            Yes

Termination payments: unused annual leave, long service leave or sick leave           Yes                                             No

 

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ATO Certified

Devotee Registered Tax Practitioner

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ATO guidance: 

 https://www.ato.gov.au/business/super-for-employers/how-much-to-pay/checklist--salary-or-wages-and-o...

 

   Payment                                                                                                            Salary or wages                      Ordinary time earnings (OTE)

Termination payments:    in lieu of noticeTermination payments                                 Yes                                            Yes

Termination payments: unused annual leave, long service leave or sick leave           Yes                                             No

 

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@Bruce4Tax wrote:

ATO guidance: 

 https://www.ato.gov.au/business/super-for-employers/how-much-to-pay/checklist--salary-or-wages-and-o...

 

   Payment                                                                                                            Salary or wages                      Ordinary time earnings (OTE)

Termination payments:    in lieu of noticeTermination payments                                 Yes                                            Yes

Termination payments: unused annual leave, long service leave or sick leave           Yes                                             No

 


Thanks Bruce, I understood the normal in lieu of notice termination payments is OTE. however, my question is when employer required employee to work through the notice period, then employer give additional 4 weeks as 'payments in lieu of notice', should this additional notice be considered as OTE for additional superannuation to employee.

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Hi @EugeneHe

 

Thanks for your posts.

 

@Bruce4Tax is correct. An in lieu of notice payment is considered OTE. In turn, super guarantee is payable.

 

If an employee works through their notice period but for some reason is paid an in lieu of notice payment, that payment will still be considered OTE as per our checklist.

 

Hope this helps.

 

Thanks, ChrisR