Generally speaking, employers are required to pay super to employees who are over 18 when their earnings are greater than $450 / in a calendar month. For employees who are under 18, employers only need to pay super for weeks where the employees also work for more than 30 hours.
When calculating the minimum super threshold amount for the month, it is based off the entire gross earnings of the employee, regardless of if the earnings are considered to be ordinary time earnings.
Once the employee's earnings reach the minimum super threshold amount of $450, the super value is calculated off the ordinary time earnings amount.
For example, say you have an employee that is ordinarily paid $25 / hour and $50 / hour for overtime.
In a given month, the employee who is over 18 and works 10 hours ordinary hours and 5 hours overtime, giving the employee a total earnings of $500 for the month.
This means they are eligible for super as they have reached the minimum super threshold but they will only earn super on the 10 hours of ordinary earnings, not the full $450.
If you pay your employees weekly and they earn less than $450 in the first week (remembering that super withheld is determined by the date paid of the pay run), there is no super withheld because the wage is under $450. However, once the employee's earnings reach the minimum super threshold amount of $450, the super value is calculated off the ordinary time earnings amount automatically.
For example …
- First week : employee's earnings $300 SGC: $0 Accumulated SGC: $0
- Second week : employee's earnings $300 SGC: $57 (=(300+300)*9.5% Accumulated SGC: $57
- Third week : employee's earnings $300 SGC: $28.5 (=300*9.5%) Accumulated SGC: $ 85.5
You can find more information about calculating super on the ATO website:
and the Fair Work website
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