Ruling Compendium SGR 2009/2EC
Status: not legally binding
Date of effect: 1 July 2009


Class of entities or scheme: Employee share schemes (ESS) have been previously excluded from ordinary time earnings (OTE) but there is no mention of ESSs in SGR 2008/D2. As such it would be useful to provide clarity around this issue in the Ruling. | Treatment of payments-in-kind revised - paragraphs 58, 256 and 257: The Commissioner has revised the statement in SGR 2008/D2 at paragraph 51 which states that salary or wages 'is not limited to payments made to employees in cash or cash equivalent but can include payments made in kind to the employee'. Also, additional discussion (paragraphs 58, 256 and 257 of the Ruling) has been included in the Ruling to address the application of the SGAA on fringe benefits, payments-in-kind, and in particular, employee share schemes (ESS). The existing SG Rulings, SGR 94/4 and SGR 94/5 were silent on the issue of non-cash benefits and ESS but stated that 'benefits subject to fringe benefits tax' were not salary or wages or OTE. Fringe benefits as defined in the Fringe Benefits Tax Assessment Act 1986 (FBTAA) are excluded under subsection 11(3) of the SGAA. Additionally, the Commissioner takes the view that other 'benefits', within the meaning of that Act, given by employers to employees that are neither fringe benefits nor salary or wages within the meaning of that Act are not salary or wages for SGAA purposes. Examples of such 'benefits' that are not salary or wages for SGAA purposes includes: In forming this view the Commissioner takes into account the intent evidenced by subsection 11(3) and the general distinction drawn for income tax, fringe benefits tax and Pay as You Go purposes between salary or wages and other kinds of employment benefits. | Practical implication and compliance/administrative issues with the inclusion of overtime in the definition of OTE: It is submitted that there will be significant increases in operating (including employment) costs for all employers if the view on overtime as espoused in SGR 2008/D2 is adopted as the final Tax Office position. The increase in costs is attributable to: | Change of the Commissioner's view on the meaning of 'ordinary hours of work' - paragraphs 13-18, 189-210: Pursuant to further consideration of the relevant case law, the Commissioner now accepts that the view expressed in SGR 94/4 in relation to overtime is the better view legally, and that the case law does not compel a departure from the position in SGR 94/4. The discussion on the meaning of 'ordinary hours of work' at Paragraphs 13-18 and 189-210 of the Final Ruling reflects and explains in detail this revised view. Clarification on existing examples, and further examples were requested on the following issues: As a result of the Commissioner's revised view, further examples to clarify when an overtime element becomes 'regular' (including frequency thresholds) will not be required. All examples in Appendix 1 have been reviewed and amended where relevant to reflect the Commissioner's revised view. See, in particular, Examples 1-8 in Appendix 1 of the Final Ruling (paragraphs 79-119). Request for an example to be included in the document to address the following issue [Entity 8]: | Shift-loading - paragraphs 225-227: The treatment of shift-loading is discussed at paragraphs 22 and 220 to 222 of the Ruling. The SGAA requires that employers make a minimum superannuation contribution of 9% of ordinary time earnings, including any shift-loading amount. A particular award or agreement may provide for higher contributions to be made in some circumstances, but that is not relevant for superannuation guarantee purposes. Comments suggested the ATO has expanded the scope of the words 'in respect of' in the definition of OTE. In SGR 94/4 it is stated that these words require a 'connection' between the employee's earnings and the employee's ordinary hours of work (SGR 94/4, paragraph 11). The ATO took the view that for a payment to be earnings 'in respect of' ordinary hours of work, it had to be made: This interpretation meant that some payments are currently considered to be 'in respect of' the employment relationship under SGR 94/4, rather than ordinary hours of work. Examples include maternity and paternity leave payments, annual leave loadings and workers' compensation payments (SGR 94/4). The draft Ruling states that 'in respect of' requires a discernable rational link (SGR 2008/D2, paragraph 14). This has resulted in the ATO changing the test of 'connectivity' to whether attendance or services of the employee during ordinary hours of work is a reason or one of the reasons for the amount earned (SGR 2008/D2). The ATO has also introduced the words 'attendance or services during' to expand the expression 'ordinary hours of work', even though these words do not appear in the statutory definition. This appears to significantly alter the intent of Parliament. It is noted that Parliament required a direct connection to ordinary hours of work, not an indirect connection to 'services'. If Parliament had intended such a broad test, it would arguably have simply used the word 'employment'. According to this new test, to fall outside of OTE a payment must be wholly unconnected with ordinary hours of work or only incidental to ordinary hours of work (SGR 2008/D2, paragraph 26). This means that items such as retention allowances and release from work duties on full pay are now included, whereas previously they would arguably have been incidents of the employment relationship. Similarly, maternity and paternity leave payments, which were stated in SGR 94/4 not to be payments in respect of ordinary hours of work, are included in OTE in draft SGR 2008/D2. This is a very significant change to the superannuation guarantee requirements as they have long been understood and applied by employers. In addition, according to the ATO's revised position, redundancy payments and notice payments would appear to be included in OTE as part of the 'reward' for an employee's services, while previously they were considered to be in respect of the termination of employment. In the final version of the Ruling, the Commissioner explains that all earnings in respect of employment are considered to be in respect of the employee's ordinary hours of work, unless they are remuneration for working overtime hours (or are otherwise referable only to overtime or to other hours that are not ordinary hours of work). The Commissioner does not consider that the services or attendance of an employee specifically during certain hours of work is necessary for the earnings to be 'in respect of ordinary hours' and therefore OTE. The Commissioner believes that the expression 'in respect of ordinary hours of work' was intended to ensure that overtime payments (and related amounts) were excluded from the earnings base. The Commissioner does not believe the expression was intended to exclude amounts paid at a worker's ordinary time rate solely on the ground that they were not earned as a direct result of actually working particular hours in ordinary time (for example. during annual leave). Redundancy payments are not considered OTE in the final version of the Ruling as they are not considered to be 'salary or wages' see paragraph 74. It was noted that the draft ruling took the view that all leave payments should be considered to constitute ordinary time earnings unless the payment could be clearly associated with service outside ordinary hours. This approach links an entitlement arising from an employment relationship to 'ordinary hours of work' even though there may be no service requirement to qualify for the entitlement and no clearly discernible link to working or attending during those hours. It was submitted that, given a perceived weakness of the nexus to ordinary hours of work, the current test for assessing whether a payment is in respect of ordinary hours of work should be retained and, therefore, the payment would be taken to be earnings if it is made for attendance or work done during those hours or an entitlement accrued as a result of that attendance or work. It was further submitted that there are leave types (such as maternity leave) which require an additional trigger event to occur before any entitlement arises. For such type of payments, the entitlement arises as a result of being employed and a trigger event occurring. It was viewed that there is no 'discernable rational link' between the payment and service in ordinary hours.

Ruling: Paragraph 236: Paragraph 239: Workers' Compensation and other payments made by an employer or on behalf of an employer will form part of an employee's OTE if it is paid in respect of ordinary hours of work. Payments made when the employee is unable to work due to injury are not 'in respect of ordinary hours worked' and are therefore not OTE. | Comments on paragraph 57: The relevant paragraphs in the final version of the Ruling are now paragraphs 39, 68 and 76. The final Ruling at paragraph 76 now clarifies that an injured person may not be required to attend work because of incapacity rather than just termination of employment. The treatment of workers' compensation payments in the final version of the Ruling remains effectively unchanged from SGR 94/4 and SGR 94/5.

Examples: Example 17: Comments were also received in relation to Example 17 (dealing with Jury Duty), requesting clarification of various points. The Commissioner acknowledges that different types of leave may be subject to particular tests of entitlement. However, the Commissioner is of the opinion that there is no basis for making any distinction between the differing types of paid leave for OTE purposes. The Commissioner's view, as expressed at paragraphs 235 and 236 in the final Ruling, is that all types of paid leave allow for an employee's salary or wages to continue to be paid while he or she is absent from work. However, as paragraph 4 of the final Ruling explains, on 12 May 2009, the Government announced that it intends to clarify the superannuation guarantee status of certain kinds of leave payments. Accordingly, the Ruling does not deal with the status of payments made to employees who are on parental leave. The Ruling also does not deal with the status of payments made to employees who are on other ancillary kinds of leave, including 'top-up payments' (as described in paragraph 37 of the Ruling). | Example 17: This example from the draft Ruling has been deleted in the final Ruling due to the Government announcement as stated at paragraph 4. Misleading terms in Appendix 1 Some of the wording used in Appendix 1 is misleading: Request for inclusion of SGR 94/4-style checklist and additional items to the list The checklist that should be included as part of the final ruling should include all of the items included in the previous SGRs as well as any new items included in SGR 2008/D2 when it is finalised. The Appendix and/or any inserted checklist should also include a more general comment on ex-gratia bonuses so as to accommodate a greater range of scenarios.

Appendix: Some of the wording used in Appendix 1 is misleading: | Request for inclusion of SGR 94/4-style checklist and additional items to the list: The checklist that should be included as part of the final ruling should include all of the items included in the previous SGRs as well as any new items included in SGR 2008/D2 when it is finalised. The Appendix and/or any inserted checklist should also include a more general comment on ex-gratia bonuses so as to accommodate a greater range of scenarios. | Appendix 1 - index of examples: No change is needed to the index of examples in Appendix 1 of the Ruling as the text/facts of Example 19 - annual leave clearly indicates that the scenario under analysis is of annual leave taken rather than paid out on termination. The example dealing with accrued bonus (Example 20 - Accrued bonus in SGR 2008/D2) has been deleted. Due to further development of the technical analysis of the phrase 'earnings in respect of ordinary hours of work' in the definition 'ordinary time earnings' in subsection 6(1), the example is no longer relevant. | Request for inclusion of SGR 94/4-style checklist and additional items to the list: The index to the examples at paragraph 78 of the serves as a summary and guide to the classification of certain types of employment remuneration and payments. The checklist in Attachment A of SGR 94/4 was substantially to the same purpose. As such, there is no need for inclusion of the checklist in the Ruling. The discussion on bonuses is at paragraphs 28 to 29 and 274 to 278 of the Ruling. Example 22 of the Ruling describes the treatment of bonuses labelled as ex-gratia but is in respect of ordinary hours of work. An observation was made that a discretionary payment made as a free gift and which is made on a personal basis rather than in an employment context is not OTE and not 'salary or wages.' However, discretionary payments (such as an ex-gratia bonus) which have no connection to ordinary hours will still be 'salary and wages' if the payment would not have been made but for the employment relationship. If the payment made has a connection with the work performed during ordinary hours, the bonus would be included in OTE, regardless of how it is described. As such, it was submitted that when the bonus fits the above description (such as a Christmas bonus does), it should constitute 'salary or wages'. In a similar comment, it was submitted that, per paragraph 12 of SGR 94/5, ex-gratia bonus payments should form part of 'salary and wages'. This is because but for the employment relationship, the bonus would not have been paid. In other words, a bonus payment is necessarily related to the recipient's services as an employee. It was also submitted that it would be rare that a Christmas bonus would be paid to an employee on long term leave without pay. Non payment of Christmas bonus to employees on leave without pay should not preclude payment of the superannuation guarantee on the Christmas bonus of all other employees, received by reason of service. | Christmas bonus/gratuity: It was also submitted that no employer would give a Christmas bonus to a person who was not an employee, which necessarily means that the Christmas bonus would be paid for services. | Example 22: It was submitted that paragraph 159 was incorrect because a cash Christmas bonus is a form of salary or wages. In addition, cash bonuses are excluded from the definition of a fringe benefit in accordance with section 136 of the FBTAA. Accordingly, a cash bonus cannot be a minor benefit. Wording suggestions (treating the payment as 'salary or wages' but not OTE) and an additional scenario (involving non-cash benefits) for this example were submitted. | Tax guidance: It was suggested that guidance should be provided as to whether bonuses and other ex-gratia payments in kind excluded from 'salary and wages' would be subject to various forms of taxation such as fringe benefits tax. | Sign-on bonuses: Additional wording was suggested in relation to sign-on bonuses. | Accrued bonuses: It was submitted that the use of the term 'accrued' in Example 20 differs from the general accounting use of this term. For accounting purposes, accrued is generally interpreted to mean a liability/asset which has accumulated over time but has not yet been paid. As superannuation would not apply to a bonus until it has actually been paid, the use of the word accrued in this example is likely to be confusing to readers. | Other bonuses: There were requests for inclusion of discussions on other specific types of bonuses. | Training bonuses: It was noted that a bonus (not ex-gratia) for completing specific training was considered as assessable income in the high court case of Smith v. Federal Commissioner of Taxation . Where such a bonus is part of a company's scheme (for example an 'encouragement to study' scheme), it is assessable income. It is submitted this case supports the conclusion that in order for a bonus to be 'salary or wages', the bonus should be paid out as a consequence of the employment relationship, rather than as a payment made to a person who happens to be an employee but does not have the characteristic of 'salary or wages'. It was also suggested that the training bonus received in example 23 had no connection to the ordinary hours worked, and was therefore not OTE for the purposes of SGAA In terms of 'salary or wages', it was submitted that the payment was paid out as a direct consequence of employment, that is, the employee would not have received the payment but for his employment. Hence, the bonus is remuneration for his services and is thus 'salary or wages'. | Retention payments: It was submitted that the discussion in paragraph 264 provides insufficient connection between the retention payment and the ordinary hours worked by the individual and does not provide sufficient reasoning as to why such payments should be included in OTE. It was also noted that OTE relies on the ordinary hours worked by one individual rather than ordinary hours worked by the employer overall. In order to qualify as OTE, it was submitted that whilst the ordinary hours worked contribute to the company's overall results, the payment should also be in some way connected to performance criteria for the individual employee. For example, the bonus payment may require that employees must reach certain targets (for example a minimum revenue target) in order to be eligible for the payment. This will create a more logical link between the payment and the ordinary hours worked by the individual, rather than the company as a whole. New wording for the discussion of retention payments in paragraph 264 was also submitted. | Performance bonus based on overall company results: It was requested that guidelines be included in the Ruling on bonus schemes which are structured so employees may be eligible to a bonus based on a number of components reflecting the employee's performance, the performance of the employee's business unit, the overall performance of the employer, that is a 'layering' of bonus payments. The treatment of bonuses as contained in the final Ruling (see paragraph 274) is now consistent with these suggestions. | Christmas bonus/gratuity: The Commissioner maintains that in cases where a payment is made and there is a family or other clear private connection between the employer and the employee, such a gift is not necessarily 'salary or wages', (although that may be the case). For example, a gift from a parent employer to their child employee at Christmas is not automatically treated as 'salary or wages' purely because an employment relationship also happens to exist. However, as explained in paragraph 274 of the final Ruling, only in those very limited cases in which the Commissioner would accept that the payment is not assessable income of the employee for income tax purposes would the Commissioner accept that the payment is made on a personal basis and so is not salary or wages, and therefore not OTE, for SGAA purposes. | Example 22: The Christmas bonus has been treated as salary and wages in the equivalent example in the final Ruling (Example 23). In addition, the reference to minor benefit has been removed. As the payment is not solely referable to hours of work outside ordinary hours, it is considered to be 'in respect of ordinary hours of work' and therefore OTE. The final Ruling now contains a discussion on non-cash benefits (see paragraph 58). | Tax guidance: Obligations other than superannuation guarantee were considered to be outside the scope of this Ruling. | Sign-on bonuses: The Commissioner believes the current discussion on sign-on bonus to be sufficient for the current purpose. | Accrued bonuses: As mentioned above, the Commissioner's interpretation of the phrase 'in respect of' differs slightly from the draft Ruling, and is no longer reliant on entitlements being accrued. As such, the example which involved an accrued bonus has been removed. | Other bonuses: The Commissioner believes the current tests explained throughout the Ruling can be applied to various scenarios without the need for addressing specific scenarios. | Training bonuses: Training bonuses are no longer discussed in the final Ruling. The Commissioner considers the discussions on other types of bonuses to be sufficient to convey the correct interpretation of the law. | Retention payments: Discussion on retention payments in the final Ruling has changed slightly from the draft Ruling in order to reflect the Commissioner's interpretation of the phrase 'in respect of' as discussed above. It is believed the new discussion addresses the concerns raised. | Performance bonus based on overall company results: The Commissioner considers the discussions on other types of bonuses to be sufficient to convey the correct interpretation of the law. | Suggested wording in relation to workers' compensation discussion in Ruling: Paragraph 236: Paragraph 239: Workers' Compensation and other payments made by an employer or on behalf of an employer will form part of an employee's OTE if it is paid in respect of ordinary hours of work. Payments made when the employee is unable to work due to injury are not 'in respect of ordinary hours worked' and are therefore not OTE. | Comments on paragraph 57: The relevant paragraphs in the final version of the Ruling are now paragraphs 39, 68 and 76. The final Ruling at paragraph 76 now clarifies that an injured person may not be required to attend work because of incapacity rather than just termination of employment. The treatment of workers' compensation payments in the final version of the Ruling remains effectively unchanged from SGR 94/4 and SGR 94/5. | Example 13: It was suggested that the payment in Example 13 represented salary or wages, noting that at common law allowances paid to employees are considered to be salary or wages. In addition, from an income tax perspective such payments are treated as employment income for the individual. The crux of the explanation should be to point out that a per kilometre reimbursement is not OTE as such a payment is akin to a reimbursement and is paid with the intention of compensating the employee for an expense that they incur, rather than as a reward for services performed during ordinary hours of work. | On-call allowances: Further guidance on on-call allowances, common in a number of industries, was requested. In some instances employees may be required to be on call outside of their usual working hours. In these cases, employees generally receive an on-call allowance for the period they are on call as well as receiving an hourly wage in the event that they are called in to work. | Availability allowances: It was requested that availability allowances (paid to employees in respect of that employee making themself available to be called into work outside of ordinary hours of work) are quite common and popular and that specific mention to this type of allowance be made. | Treatment of various types of allowances: It was commented that by applying the principle stated in paragraph 27, it was difficult to discern the rationale behind the determination that an overtime meal allowance does not form part of OTE yet an allowance paid for poor living conditions does form part of OTE as all allowances relate in some way to being deployed on duty, including a meal allowance paid while working overtime. | Example 13: The Commissioner believes that payment (in Example 16 in the final Ruling) is a reimbursement for the expense calculated on a reasonable basis according to income tax laws, and is not 'salary or wages'. | On-call allowances: Discussions relating to on-call allowances have been added to the final version of the Ruling (see paragraphs 44-45). | Availability allowances: This type of allowance has been included in the discussion of on-call allowances. | Treatment of various types of allowances: The Commissioner explains in the final Ruling that all earnings in respect of employment are in respect of the employee's ordinary hours of work unless they are remuneration for working overtime hours, or are otherwise referable only to overtime or to other hours that are not ordinary hours of work (see paragraph 27). It was noted that the draft Ruling treated the terms 'remuneration' or 'earnings' and 'salary or wages' as being synonymous, and it was recommended that all references to earnings being interchangeable with salary or wages be removed from the Ruling. | Paragraph 13: It was also noted that paragraph 13 indicates that 'earnings' refers to 'the remuneration paid to an employee, as a reward for the services of the employee'. Commonly, remuneration is taken to include fringe benefits and other items such as salary sacrifice superannuation contributions. Whilst it was thought that later sections of the draft Ruling clearly indicate that these are not included in OTE, it was suggested that the inclusion of a cross reference to these in paragraph 13 would be appropriate. In the Commissioner's opinion, when used in the context of the SGAA, the ordinary meaning of 'earnings' is sufficiently similar to the meaning of 'salary or wages' that the two may be regarded as synonymous. This practical effect is mentioned in new paragraph 11. | Paragraph 13: The Commissioner's equivalent reference to 'earnings' in the final Ruling (paragraph 12) relates to the larger concept of earnings rather than just 'ordinary time earnings'. As such, it was not considered appropriate to bring in discussion about OTE at that point. Further, as mentioned above, the final Ruling equates (for the purposes of the SGAA) earnings with 'salary or wages'. Comments were made regarding the prospective nature of the effective date (1 July 2009) of the Ruling. Issues identified as a cause for potential confusion an uncertainty for employers and employees in the period up to 1 July 2009 includes: | Date of effect of Ruling will be 1 July 2009: 1 July 2009 will remain the effective date of the Ruling. The Commissioner is of the view that retrospective application of the change in view in a number of areas will create legal uncertainty and will make the implementation and administration of the updated view highly burdensome. Paragraph 77 in the Ruling now states: This Ruling applies to payments made to employees in the quarter beginning on 1 July 2009 and all later quarters. However, the Ruling will not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute with the Commissioner agreed to before the date of issue of this Ruling. | Payment in lieu of notice: It is noted that though the checklist in SGR 94/4 for salary and wages and ordinary time earnings shows payment in lieu of notice as not being an OTE, the Ruling should take into consideration the NSW Court of Appeal decision of Peter Willis v. Health Communications Network Ltd [2007] NSWCA 313 (6 November 2007) which found that where there is a contractual entitlement to make super contributions, employers are obliged to do so when paying out notice. | Payments in settlement of a dispute: The Commissioner considers that the view in SGR 2008/D2 is legally correct and consistent with the Commissioner's view of the treatment of these payments for income tax purposes. The relevant paragraph containing this discussion is now paragraph 63. | Redundancy payments: The Commissioner's view has changed from the statement at paragraph 58 of SGR 2008/D2, and paragraph 23 of SGR 94/5, that redundancy and employment termination payments are salary or wages. See paragraph 74 of the Ruling. Additional discussion has been included in the Final Ruling to address the issue. Redundancy payments made on termination of employment are not a reward for services rendered by an employee, even if part of the payment is calculated by reference to the employee's period of service with the employer. They are payments to compensate the employee for the loss of their job; not a reward for their services. | Unfair dismissal: For similar reasons to genuine redundancy payments, it remains the Commissioner's view that payments by way of compensation for unfair dismissal are not 'salary or wages'. See paragraph 75 of the Ruling. | Payment in lieu of notice: Additional discussion has been included in the Ruling to address the issue. An employee may be entitled to a period of notice before the employer's termination of his or her employment takes effect. Awards and agreements often provide that, instead of giving this notice, the employer may simply pay an amount equivalent to the ordinary time rate of salary or wages that the employee would have earned during the notice period. Such payments are OTE. See paragraph 38 of the Ruling. Payments for work wholly or principally of a private or domestic nature and Remuneration of local government councillors should be included within the ambit of the SGAA. Policy comment on the Superannuation Guarantee legislative framework which is not within the technical scope of the Ruling. A question was raised as to the correctness of the reference in paragraph 2 of the draft Ruling to the Explanatory Memorandum (EM) to the Superannuation Laws Amendment (2004 Measures No. 2) Bill 2004. Paragraph 4.14 of the EM states that this standardisation only comes into effect on 1 July 2010, not 2008 as stated in the draft Ruling. The Commissioner is satisfied that the reference in the final Ruling (also in paragraph 2) is correct. The reference immediately following the effective date is correctly to the Superannuation Laws Amendment (2004 Measures No. 2) Act 2004 itself. Reference to the EM is made at a later stage in the paragraph, and relates to the general discussion on standardising OTE. It appears that the EM may have incorrectly mentioned 1 July 2010 instead of 1 July 2008. The date of effect in the amending Act itself is 1 July 2008. It was noted that there was an error regarding the name of the Federal Workplace Relations Act 1996 as cited in the draft Ruling. The relevant correction has been made in the final Ruling. At paragraph 24 of the Draft Ruling, it is stated that: On a strict reading of the definition of OTE such an interpretation is open. However, we submit that such an interpretation could not have been intended. For example, if irregular overtime was paid above award rates, then the Commissioner is asserting the 'over award' component would form part of OTE under the second limb of the definition of OTE. However, the Commissioner accepts the award component of such overtime is not OTE under the first or second limbs of the definition. It would seem strange that Parliament would have intended this result. It is much more likely that Parliament was merely intending to confirm that the over award component of any amount payable in respect of ordinary hours also formed part of OTE. The Commissioner agrees with this comment and has made changes to the final Ruling at paragraphs 21 and 22 and 217 to 222. This is also a change in the Commissioner's view as stated at paragraph 13 of SGR 94/4.


The edited version of the Compendium of Comments is a Tax Office communication that is not intended to be relied upon as it provides no protection from primary tax, penalties, interest or sanctions for non-compliance with the law. | This is a compendium of responses to the issues raised by external parties to draft Superannuation Guarantee Ruling SGR 2008/D2 - Superannuation guarantee: meaning of the terms 'ordinary time earnings' and 'salary or wages'. | This compendium of comments has been edited to maintain the anonymity of entities that commented on the draft ruling. | Tax Office Response/Action taken | Requests for clarification and qualification to what is a 'payment in kind': Clarification is sought on the application of the Superannuation Guarantee Administration Act 1992 (SGAA) on fringe benefits, payments-in-kind, and in particular, employee share schemes. | ...Security Officer working shift, who has requested that they be paid 12.75% superannuation on a shift loading of 33.9% instead of the calculation being made with 9% and the higher amount is in this case the 12.75% on the normal wages without consideration of the shift loading. | A point of contention with employees who are on the block pay system is the refusal of the employer to pay the 12.75% superannuation on the block pay. ... [employees] are on a 33.9066% loading and are paid at the rate of 1.339066 of a normal day worker. | It is submitted that whichever is the highest value either 12.75% on the base day pay level or the 9% on the 1.33 ...... times the normal pay for shift workers. | There is a loading that is about 47% for a few officers and the 9% is higher in this case and is paid. | On the facts given in the comment it appears that the relevant agreement may contemplate superannuation contributions being paid at the rate of 12.75% of ordinary time earnings excluding the relevant shift-loading. But that is not the contribution required for SG purposes. The contribution required is 9% of ordinary time earnings including the shift-loading. | Payments to an employee in relation to ... | Payments for workers' compensation - paid while employee performs/attends work | Payments for workers' compensation - paid where employment has been terminated | Payments for workers' compensation - paid while employee is unable to attend work and the employment has not been terminated (ie. the intention is for the employee to return to work) | Over-award payments, shift-loadings and commissions do not have to be paid in respect of ordinary hours of work. They are specifically included within the definition of OTE irrespective of whether or not they are earnings in respect of 'ordinary hours of work'.