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Newbie

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Hello, Im just new here. I just want to ask regarding my super because it was drastically went down last year around month of june. My employer change the format of our payslip.
Here are the Examples so it will not be confusing:

before the changes
hourly rate is $35
they are computing my super on this according to my basic hours every forthright (76 hrs.)

New format;
hourly rate is $20
regional loading allowance $15

now they paying my super on the $20 hourly rate.
every forthright (76 hrs)
Im so confused but when i ask them they are saying this is legal. and im not pretty sure about the law or policy with regard to this.
Please let me know if there’s anyone can really told if this is ok or not. im a full time employee by the way.
thanks in advance
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Best answer

Devotee

Replies 5

Hi cody

 

Allowances are generally included in ordinary time earnings (OTE), so would be included when an employer is working out the super guarantee contributions to pay for employees.

 

It's different if the employer is reimbursing you for expenses you've incurred or is paying an allowance for expenses you'll incur where there's an expectation that the full allowance will be spent on that expense.

 

Here's a link to information on ato.gov.au about unpaid super.

 

I'm an ATO employee voluntarily providing my time here

6 REPLIES 6

Best answer

Devotee

Replies 5

Hi cody

 

Allowances are generally included in ordinary time earnings (OTE), so would be included when an employer is working out the super guarantee contributions to pay for employees.

 

It's different if the employer is reimbursing you for expenses you've incurred or is paying an allowance for expenses you'll incur where there's an expectation that the full allowance will be spent on that expense.

 

Here's a link to information on ato.gov.au about unpaid super.

 

I'm an ATO employee voluntarily providing my time here

Newbie

Replies 4

Thanks for the reply, i am still confused because when i show them this words from the website of ato website itself.

The minimum super you must pay each quarter for each eligible employee is called the super guarantee (SG).

Currently the SG is 9.5% of their 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.

To work out what you must pay, multiply your employee's OTE for the quarter by the SG rate (or the percentage you use if you're paying super at a higher rate)

My employer told that the word “USUALLY “ means that its not a mandatory, but i think it wasn’t right.
Is there any rules, law or policy that i can show them?

thank you in advance.

Devotee

Replies 3

Hi Cody

 

The word usually does NOT mean it's optional for an employer to include an amount in ordinary time earnings (OTE).

 

It means that except for a limited number of exceptions and inclusions OTE is the amount someone earns in their ordinary hours of work.

 

Section 23 of the Super Guarantee (Administration) Act 1992 sets out how contributions made to super accounts of employees reduce the SG shortfall for an employee. This is where it says that these contributions are based on ordinary time earnings.

 

OTE is then defined in section 6. It defines OTE as the total of earnings in respect of ordinary hours of work (except for any part of a lump sum on leaving work that relates to unused leave) plus earnings of over-award payments, shift-loading or commission. It then limits OTE to the maximum contribution base.

 

So the definition in the Act isn't overly helpful when it comes to specific types of payment. That's where the information on ato.gov.au about the kinds of amounts that are and aren't included in OTE comes in.

 

I'd suggest you ask your employer to contact the ATO to confirm that they're correct in how they're interpreting OTE for you. If they're making a mistake and not paying enough they'll be liable for the SG charge. The SG charge uses Salary or Wages as the earnings base so will result in a higher amount being payable, not to mention the other disincentives that are built in to the SGC calculation.

 

If your employer isn't helpful in resolving this here's information on ato.gov.au about notifying the ATO about possible unpaid super.

 

I'm an ATO employee voluntarily providing my time here

Newbie

Replies 0

Im going to try to talk to my employer, and i hope we can resolve it, cause the thing they telling me that they doing it legally which is i am not really sure. thank you so much for your time and i’ll be back for the updates.

Newbie

Replies 1

Hi SebRieter,
Can you please send me a link of that Section 23, so that i can show to my employer. I really appreciate your time for helping us.

Devotee

Replies 0

Hi cody

 

I'm not sure that it'll be all that helpful, but here's a link to section 23 of the SG Admin Act.

 

The reason I'm saying it's not all that helpful is that it refers to ordinary time earnings in the formula but doesn't define OTE.

 

The definition of OTE is in section 6 of the SG Admin Act.

 

But again, the definition doesn't get into specific types of allowances, and the specific information is what you need. And the specific information isn't in the law. This is where the guidance we provide on ato.gov.au on the kinds of amounts that are and aren't included in OTE are more helpful.

 

If I was an employer and I wasn't sure if an allowance I was paying was to be included in OTE I'd either be assuming it was included or seeking a ruling from the ATO to confirm that it shouldn't be included. Potentially very expensive to assume it shouldn't be included and to stop paying SG contributions on that amount if it later turns out that SG should have been paid.

 

I'm an ATO employee voluntarily providing my time here

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