22 Oct 2008

Recently, the ATO updated its defi nitions of what kinds of work constitute ordinary time earnings, or OTE.

From 1 July 2008, OTE must be used to calculate the minimum superannuation guarantee (SG) contributions you need to make for your employees, so it’s important you’re up to date on the details.

The ATO says that “Ordinary time earnings are generally what your employees earn for their ordinary hours of work, including:

• over-award payments
• commissions
• allowances, and
• paid leave.”

It also indicates that generally, OTE don’t include overtime, although there are some cases in which overtime is counted. The ATO website provides examples of a few scenarios alongside its information on OTE, at www.ato.gov.au.

The latest OTE checklist indicates that:

• expense allowance that’s paid with the expectation that it will be fully expended in producing income (for example, car allowance paid to real estate agents) is not considered OTE
• workers’ compensation payments,including top-up payments, paid by the employer where work is performed, are now considered OTE
• as mentioned above, overtime may be considered OTE in some cases.

See the full checklist for more specifics of ordinary time earnings.

Have you met your TFN obligations?

You’re obliged to provide HESTA with the TFN of any employee who has completed a TFN declaration. This applies to any existing employees who completed a TFN declaration for employment purposes from 1 July 2007 as well as to all new employees, and to any pre-July 2007 employees who provided you with their TFNs for superannuation purposes.

Failing to meet your TFN obligations is a serious offence. It also means that employees whose TFNs you haven’t supplied to us will pay 31% extra tax on your contributions to their super, and they won’t be able to make any after-tax contributions to their accounts. For more information, visit www.ato.gov.au/super.

Haven’t paid enough?

If you haven’t met your SG requirements, you’ll need to lodge a Superannuation guarantee charge statement – quarterly, and pay the super guarantee charge to the ATO.

The super guarantee charge will include the amount of your SG shortfall, interest of 10% p.a. on that amount, and a $20 processing fee per employee, per quarter. Avoid the hassle and make sure you meet your SG obligations. For more information, contact the ATO on 13 10 20, or at www.ato.gov.au.

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