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Workcover Super Payments

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We have a staff member who worked full time 37.5 hrs per week and after having a workcover matter he now works 15 hrs per week.

We will be paying him for the 37.5hrs per week, which the portion that he doesn't physically work in the office will be reim by Workcover

Hence they wil reimb us 22.5hrs for example.

Do we pay super on the 22.5 hrs that we are getting reimb for or just the 15 hrs that is is acutally working in the office and if we do what is the percentage for the 22.5 hrs is it 9.5% as per normal?

 

for example

Mr Smith works 37.5 hrs per week. We pay him his wage for the 37.5hrs per week, out of that a portion is his actual time in the office of 15hrs and the rest 22.5 hrs is needing to be reimb by Workcover after submissions. We pay his 9.5% on the 15 hrs as that is an actual wage but the 22.5 hrs...do we pay super or not pay super on that portion.

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ATO Certified Response

Community Moderator

Replies 4

Hi @AmaSan

 

Welcome to our Community.

 

You are required to pay super guarantee (SG) at 9.5% of ordinary time earnings (OTE). OTE is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but not overtime payments.

 

The Checklist: Salary or wages and ordinary time earnings page on our website will help you identify what payments are considered salary or wages and whether they are considered part of ordinary time earnings (OTE) for super guarantee purposes.

 

For a more in depth read, we recommend that you look at the Superannuation Guarantee Ruling SGR 2009/2 from our legal database.

 

Workers' compensation payments are split into two payment types:

  • Workers' compensation: returned to work
  • Workers' compensation: not working

 

Workers' compensation payments made to an employee for hours worked are considered OTE. As SG is payable on OTE, SG will be required on those payments.

 

Workers' compensation payments made to an employee for hours where they are not working are not considered OTE. In turn, these payments don't require SG to be paid.

 

Of course we always recommend that you check any applicable awards, agreements and contracts to ensure that there are no additional super requirements.

 

Hope this helps.

 

Thanks,

 

ChrisR

5 REPLIES 5

Most helpful response

ATO Certified Response

Community Moderator

Replies 4

Hi @AmaSan

 

Welcome to our Community.

 

You are required to pay super guarantee (SG) at 9.5% of ordinary time earnings (OTE). OTE is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but not overtime payments.

 

The Checklist: Salary or wages and ordinary time earnings page on our website will help you identify what payments are considered salary or wages and whether they are considered part of ordinary time earnings (OTE) for super guarantee purposes.

 

For a more in depth read, we recommend that you look at the Superannuation Guarantee Ruling SGR 2009/2 from our legal database.

 

Workers' compensation payments are split into two payment types:

  • Workers' compensation: returned to work
  • Workers' compensation: not working

 

Workers' compensation payments made to an employee for hours worked are considered OTE. As SG is payable on OTE, SG will be required on those payments.

 

Workers' compensation payments made to an employee for hours where they are not working are not considered OTE. In turn, these payments don't require SG to be paid.

 

Of course we always recommend that you check any applicable awards, agreements and contracts to ensure that there are no additional super requirements.

 

Hope this helps.

 

Thanks,

 

ChrisR

Newbie

Replies 1

Hi There,

I am wondering if I could ask for some clarity on the following:

"Workers' compensation payments made to an employee for hours worked are considered OTE. As SG is payable on OTE, SG will be required on those payments."

 

Can you please clarify what compensation payments made to an employee for hours worked/ OTE are considered as in the following scenario?

Eg Sam worked 30 hours per week before her injury and now works 15 hours due to restrictions which she is paid $200 per week for, in addition to her earnings for those 15 hours Sam is also getting $200 in weekly compensation as the top up or make up pay to her normal weekly earnings or pre injury average weekly earnings as defined by the companies insurer.

Does Sam get paid SG on $200 for hours actually worked/ OTE OR SG on $400 for hours worked and hours not worked that are made up by the compensation benefit she is being paid by her insurer or employer in addition to her actual earnings.

 

Thanks so much for your help.

Sarah

 

 


@ChrisATO wrote:

Hi @AmaSan

 

Welcome to our Community.

 

You are required to pay super guarantee (SG) at 9.5% of ordinary time earnings (OTE). OTE is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but not overtime payments.

 

The Checklist: Salary or wages and ordinary time earnings page on our website will help you identify what payments are considered salary or wages and whether they are considered part of ordinary time earnings (OTE) for super guarantee purposes.

 

For a more in depth read, we recommend that you look at the Superannuation Guarantee Ruling SGR 2009/2 from our legal database.

 

Workers' compensation payments are split into two payment types:

  • Workers' compensation: returned to work
  • Workers' compensation: not working

 

Workers' compensation payments made to an employee for hours worked are considered OTE. As SG is payable on OTE, SG will be required on those payments.

 

Workers' compensation payments made to an employee for hours where they are not working are not considered OTE. In turn, these payments don't require SG to be paid.

 

Of course we always recommend that you check any applicable awards, agreements and contracts to ensure that there are no additional super requirements.

 

Hope this helps.

 

Thanks,

 

ChrisR


 

ATO Certified Response

Community Moderator

Replies 0

Hi @Sarah1234

 

Welcome to our Community.

 

As previously stated, workers' compensation payments are split into two payment types:

  • Workers' compensation: returned to work
  • Workers' compensation: not working

 

The reason for this split is because ordinary time earnings (OTE) are generally what employees earn for their ordinary hours of work. These earnings are what the employer is required to pay super on, once the earnings are paid to the employee.

 

Paragraph 12 of Superannuation Guarantee Ruling SGR 2009/2 (that you can access from our legal database) defines earnings, for the purpose of the definition of OTE, as being the remuneration paid to the employee as a reward for the employee's services.

 

This means that not all payments received by an employee are earnings or OTE. In turn, workers compensation paid to an employee for hours worked (reward for the employee's services) are OTE, while workers compensation paid to an employee for hours not being worked are not OTE.

 

Refer to paragraphs 39, 46, 68, 76, 147 to 153, 200 and 271 to 273 of the ruling for further information.

 

Hope this helps.

 

Thanks,

 

ChrisR

I'm new

Replies 1

What about the situation where an injured employee is working reduced hours with a host employer arranged through the workers compensation insurer?

Noting the above, superannuation only needs to be paid for the hours actually worked.

However, just want to double check that it is the employer and not the host employer who needs to pay the superannuation (since the employee is working, but not for the employer).

ATO Community Support

Replies 0

Hi @lauarg1,

 

Great question. Under federal legislation for super guarantee (SG): 

  • there has to be an employer/employee relationship
  • the employer is required to pay minimum 9.5% on the employee's OTE
  • an employee needs to be paid minimum $450 in salary or wages in the respective calendar month in order to receive the SG.

The employer may have further obligations under the employee's industrial award or agreement and can speak to Fairwork about this.

 

For your employee you can speak with the workers compensation (WC) representative, find out their position on SG. They may take it into account when determining the workers comp' amount being paid to your employee.    

 

If you are not paying wages to your employee and the host employer is not paying wages to the employee then you may not be obligated to pay it.

 

After you have used the links and spoken with the WC rep', you may like to email superadvice@ato.gov.au. They can look into this further for you and advise you accordingly.

 

Links -

Fairwork

Working out if you have to pay super.

 

All the best.