Ordinary Time Earnings

Understanding what superannuation is based on (Ordinary Time Earnings)

Most working Australians know that the Superannuation Guarantee (SG) means their employer pays a percentage of their Ordinary Time Earnings (OTE) into a super fund. The Government sets a minimum percentage but employers may pay more than that.

What are OTE?

OTE refers to money earned under normal circumstances, rather than overtime. For many people this is very simple and it’s easy to calculate your super liability for them.

However, if their pay consists of various elements, it is not quite as clear and the following table may help you understand what is and is not classified as OTE. Note that back pay is treated the same way for SG purposes.

OTE includes: Examples
Awards & agreements Usual hours, casual shift-loadings, over-award payments, piece-rates
Allowances Danger, retention, unconditional extra payment
Payment of expenses Return to work (under workers compensation)
Leave payments Annual, sick, long service
Bonuses Performance, Christmas, ‘ex-gratia’ for ordinary hours
Other Commissions, Termination payments (in lieu of notice)
OTE excludes: Examples
Over time amounts Hourly rates, loadings, annualised rates, lump sum payments, casual employees (bandwidth clause or otherwise)
Payment of expenses Reimbursements, unfair dismissal, petty cash, workers’ compensation (if not working)
Leave payments Parental, jury duty, defence reserve service
Bonuses For overtime
Other Termination payments (unused sick, annual or long service leave)

If you use another system of calculating SG payments, it must be at least equivalent to the minimum SG of OTE for each employee.

Email: avsinfo@avsuper.com.au  |  Local call: 1300 128 751  |  Phone: 02 6109 6888  |  www.avsuper.com.au

This information is of a general nature only and does not take into account your personal objectives, situation or needs. Before making a decision about AvSuper, you should consider your own requirements and the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD). For a copy call us or visit the AvSuper website, www.avsuper.com.au. AvSuper Pty Ltd (ABN 46 050 431 797, AFSL 239078) is the Trustee of the AvSuper Fund (ABN 84 421 446 069). FS3000.5 02.2021