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ICB Main Site -> Forum Home -> All things Bookkeeping.... ask away -> Superannuation on Unused Annual Leave
Superannuation on Unused Annual Leave
Wed 29 Jun 2011 10:53 PM
Kooki
No Membership


21 posts
I have read on the ATO website under Ordinary Time Earnings that 9% Super is not payable on unused annual leave  paid on termination to employee's as part of their final payout.

In most places I see that Super has in fact been paid on these unused AL payments.

I just want to be sure that I am interpreting the ATO guide correctly that there is no obligation to pay 9% on unused annual leave accrued by the employee and not taken.

Can anyone here confirm that this is correct?

Thanks!
 
 
 
Wed 29 Jun 2011 11:16 PM
Matthew Addison
Fellow in Practice
Practice Certificate


426 posts
> Hi
THe ATO information clearly states 9% SGC is on Ordinary Time Earnings.
They then provide a checklist of what is in and out of Ordinary Time Earnings
Termination pay for unusued annual leave is specifically NOT included
therefore no SGC on Termination pay for unused annual leave

always check the award that may apply though for any obligations of that award under fairwork
>
>
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______________________
Executive Director & thought provoker
Institute of Certified Bookkeepers
 
 
 
Wed 29 Jun 2011 11:33 PM
Kooki
No Membership


21 posts
Thanks but gets complicated when you say Fairwork can override ATO laws.  Its never straight forward  Frown

Edited at 29 Jun 2011 11:33 PM GMT
 
 
 
Wed 29 Jun 2011 11:56 PM
Kooki
No Membership


21 posts
I just wanted to add that if the Super Contributions are paid after the cut-off date than 9% SGC is payable on the total wages and salaries.  I just had this told to me by ATO representive.  This is offered as incentive for employers to pay on time.  If they don't pay on time then it is 9% on everything.   I am in the midst of completing a SGC audit and discovered this when completing their forms.  
 
 
Thu 30 Jun 2011 01:36 AM
Matthew Addison
Fellow in Practice
Practice Certificate


426 posts
>
I do not believe that would be correct - and would like to see the technical reference that provides the direction that that would be the case.

I have just reviewed the ATO website and their guide to completing superannuation guarantee charge forms which clearly says you still use ordinary time earnings
so I believe your advice is wrong
The document I reviewed included "Completing your superannuation guarantee charge statement - quarterly" page 26 has the definitions on it for "Earnings Base"
Instructions and forms for employers NAT 9600-09.2009




>
>
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______________________
Executive Director & thought provoker
Institute of Certified Bookkeepers
 
 
 
Thu 30 Jun 2011 01:52 AM
Matthew Addison
Fellow in Practice
Practice Certificate


426 posts
Yes I agree with the confusion angle
it isnt that fairwork overrides ato laws, it is more that the ato law has a position for the normal non-award person but then an award can go and force further obligations on the employer.

So the base position stands ie no super on termination for unused annual leave, but fairwork may apply another super obligation
so one is the tax obligation - which you are ok with
but then make sure there isnt an award provision on the employee that imposes a different obligation
>
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______________________
Executive Director & thought provoker
Institute of Certified Bookkeepers
 
 
 
Sun 03 Jul 2011 11:11 PM
Kooki
No Membership


21 posts
Matthew Addison said:
“>
I do not believe that would be correct - and would like to see the technical reference that provides the direction that that would be the case.

I have just reviewed the ATO website and their guide to completing superannuation guarantee charge forms which clearly says you still use ordinary time earnings
so I believe your advice is wrong
The document I reviewed included "Completing your superannuation guarantee charge statement - quarterly" page 26 has the definitions on it for "Earnings Base"
Instructions and forms for employers NAT 9600-09.2009




Reference - Late super payments use total gross salary and not OTE.

> http://www.ato.gov.au/corporate/content.aspx?menuid=0&doc=/content/39079.htm&page=20&H20

Scroll right to the end - Total Salary or Wages





Edited at 03 Jul 2011 11:13 PM GMT
 
 
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