Important Change to Holiday Loading & Super

As part of our testing with the ATO for Pay Day Super, we were tripped up by this little gem:

Annual leave loading is included in ordinary time earnings (OTE) unless it is clearly linked to lost overtime.

This is the complete opposite of what almost every employer has been doing since the dawn of time.

https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings/superannuation-on-annual-leave-loading

Please note the evidence requirements — the link states this must be documented in writing. 

By default the Payroll includes A/L loading in the calculation of Qualified Earnings, and will therefore calculate Superannuation on that amount.

To Exclude an Employee from Super on Annual Leave Loading.

The determination of Super on Annual Leave loading is  either 1) an Award, 2) an EBA or 3) a signed contractual agreement.

Failing those, the default ATO position is that it is part of OTE, and therefore part of QE.

In all cases, the commonality is the Award structure, which basically groups employee's together.

So a new Tick box is in the Award maintenance screen, creatively called 'No Super on AL loading'.  

It also requires each employee to be assigned one of these 'Awards'.

Open