News Detail

New Changes to Employer Super Obligations

Employers are required to make a minimum superannuation contribution of 9 per cent, of each employee’s ‘notional earnings base’. However, from July 1, the earning base to be applied in calculating contributions under the Superannuation Guarantee rules has been changed to be based on the employee’s ‘ordinary time earnings’ (OTE).

Ordinary time earnings are generally considered to be what the employer pays to an employee for ordinary hours worked and includes other payments such as shift loadings, allowances, bonuses, commissions and paid leave (excluding lump sum payments on termination in respect of unused sick leave, annual leave or long service leave). This is a significant change from last financial year, and the new interpretation is set out in the ATO’s Superannuation Ruling SGR 94/4.

As with previous years, employee’s notional earnings base is still subject to a maximum contribution, which is indexed annually. For 2008/09 the maximum contribution base is $38,180 per quarter, which means that an employer is not required to pay superannuation contributions above this amount.