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"Salary and Wages" or OTE for $450 monthly threshold eligibility

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Newbie Registered Tax Practitioner

Views 1247

Replies 5

Hi all,

 

Can anyone confirm which wage figure is used to determine monthly SG minimum earnings?

For exmple - an employee who earns $500gross in a calendar month - split as follows $300 OTE and $200 overtime? do they qualify for SG payment?

 

Thanks,

Grant

1 ACCEPTED SOLUTION

Accepted Solutions
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Best answer

Anonymous

Replies 4

Hi @GrantAndersen

 

There are two separate issues that need to be considered when it comes to the Super Guarantee .

 

1/ If an employee’s monthly total gross Salary & Wages which includes both Ordinary Times Earnings (OTE) and Non-OTE, are $450 or more per month in order to qualify for  Super Guarantee purposes.

 

If total gross Salary & Wages are under the SG minimum requirements then the payments do not qualify for SG purposes, and there isn’t anything else to consider.

 

For more detailed information about the relationship between Salary and Wages and OTE for Super Guarantee purposes have a look at paragraphs 7 - 9 of ATO ruling SGR2009/2.

  

2/ If the monthly total gross Salary & Wages meets the SG minimum requirements, then the employer is obliged to pay super but only in relation to the OTE components of those gross Salary & Wages. 

 

Now, if we look at your example: 

 

The answer is YES, as the total $500 gross payment (OTE and Non-OTE) meets the minimum SG requirements  of $450 per month or more.

 

However, only the $300 identified as OTE qualifies for the SG payment.  Which means that the employee will be entitled to SG payments based on the $300 OTE. 

 

The $200 overtime  is not considered to be OTE and does not qualify for SG payments, even though it may form part of the total gross payment, have a look at paragraphs 41 - 43 of ATO ruling SGR2009/2.

 

The ATO also have a checklist that can be used to identify what payments are considered as OTE for SG purposes.

 

As you can see from the ruling SGR2009/2 the issue can be very involved so the better way forward if your still confused about this issue is to email ATO Super Advice  and this may also give you the opportunity to discuss with the technical officer that is going to respond to your request.

 

ATO 13 10 20

5 REPLIES 5
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Best answer

Anonymous

Replies 4

Hi @GrantAndersen

 

There are two separate issues that need to be considered when it comes to the Super Guarantee .

 

1/ If an employee’s monthly total gross Salary & Wages which includes both Ordinary Times Earnings (OTE) and Non-OTE, are $450 or more per month in order to qualify for  Super Guarantee purposes.

 

If total gross Salary & Wages are under the SG minimum requirements then the payments do not qualify for SG purposes, and there isn’t anything else to consider.

 

For more detailed information about the relationship between Salary and Wages and OTE for Super Guarantee purposes have a look at paragraphs 7 - 9 of ATO ruling SGR2009/2.

  

2/ If the monthly total gross Salary & Wages meets the SG minimum requirements, then the employer is obliged to pay super but only in relation to the OTE components of those gross Salary & Wages. 

 

Now, if we look at your example: 

 

The answer is YES, as the total $500 gross payment (OTE and Non-OTE) meets the minimum SG requirements  of $450 per month or more.

 

However, only the $300 identified as OTE qualifies for the SG payment.  Which means that the employee will be entitled to SG payments based on the $300 OTE. 

 

The $200 overtime  is not considered to be OTE and does not qualify for SG payments, even though it may form part of the total gross payment, have a look at paragraphs 41 - 43 of ATO ruling SGR2009/2.

 

The ATO also have a checklist that can be used to identify what payments are considered as OTE for SG purposes.

 

As you can see from the ruling SGR2009/2 the issue can be very involved so the better way forward if your still confused about this issue is to email ATO Super Advice  and this may also give you the opportunity to discuss with the technical officer that is going to respond to your request.

 

ATO 13 10 20

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Newbie Registered Tax Practitioner

Replies 3

Hi @Anonymous

 

Thanks for the reply.  This is generally where I got to with my interpretation, however a call to the ATO yielded the opposite response, hence my confusion. 

 

In the SGAA (1992) the only mention of $450.00 is in regard to calculation of the "Superannuation guarantee shortfall", when they refer to Super guarantee shortfall- does that actually mean the Superannuation Guarantee? 

 

Thanks,

Grant

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Anonymous

Replies 0

 @GrantAndersen

 

Hi Grant,

 

your correct the shortfall does refer to the SG, .... have at look at this ATO webpage about the the-super-guarantee-charge.

 

Sometimes if you look behind the legislation and refer to the Explanatory Memorandum of the relevent Bill it can provide a good run down of how the legislation is intended to operate (with examples), and sometimes is a better reference than the ATO website.

 

I would also like to make you aware that the answer I have provided is my interpretation. 

The ATO should respond once the  forum moderators /  support get a response from "technical officers ", thats if they have escalted the issue.

 

Regards

MVF

 

 

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Community Support

Replies 1

Hi @GrantAndersen & @Anonymous,

 

We've had our technical experts review this and the response provided by @Anonymous is correct.

 

@GrantAndersen thanks for sharing your recent experience with our contact centre - we've forwarded your feedback to the  relevant area for training and monitoring purposes.

 

Thanks, NicM.

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Anonymous

Replies 0

hi @NicM @AmandaE @PaulM @JodieH

 

Thanks for confirming the answer is correct.

 

Would it be possible to mark the correct answer as " Certified by ATO ", so others know by looking at it that it is correct and don't have to scroll down this post to see that the ATO confirms its correct ???

 

 

MVF