The Superannuation Guarantee Amnesty was introduced on 24 May 2018 by the Minister for Revenue and Financial Services in a bid to tackle non-payment of employee super.
The Amnesty provides a one-off opportunity for employers to self-correct any past super guarantee (SG) non-compliance without incurring a penalty. However, there is a lot of ambiguity around which employees are entitled to compulsory super payments.
Small business employers need to pay special attention to these particular areas:
Ordinary time earnings
An understanding of ordinary time earnings (OTE) is essential as it is used to calculate tan eligible employees minimum SG contributions. OTE is generally what your employees earn for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but not overtime payments. The SG is 9.5 per cent of an eligible employees ordinary time earnings (OTE).
If you make super contributions under an award, check that they are enough to satisfy both the award and the SG. Issues can occur where an agreement prevails over an award, no ordinary hours of work are stipulated, where an employee gets reimbursed, there is no award or agreements and where overtime is paid the same as ordinary hours.
So you think you do not need to pay contractors super? Think again. Some contractors may be entitled to super.
The ATO also sees cases where employers classify employees as contractors, and consequently, forgo paying their super. If you are unsure of whether a worker is a contractor or employee, or if you unsure if your contractors are entitled to super, seek professional advice.