About payment types
As an employer, you use:
- OTE to work out the minimum super guarantee contribution for your employees. OTE is the amount you pay employees for their ordinary hours of work, including things like commissions and shift loadings.
- salary and wages to work out the super guarantee charge. You only need to do this if you missed paying the minimum super guarantee contribution by the due date. Salary and wages are similar to OTE but also includes any overtime payments.
Payment types
Overtime
|
Payment |
Salary or wages |
OTE |
|---|---|---|
|
Overtime hours over and above the ordinary hours stated in an award or agreement (see example) |
Yes |
No |
|
Overtime where the ordinary hours of work are not stated in an award or agreement, or not separated from other hours (see example) |
Yes – all hours worked |
Yes – all hours worked |
Casual work, piece work and commissions
|
Payment |
Salary or wages |
OTE |
|---|---|---|
|
Casual employee shift loadings |
Yes |
Yes |
|
Casual employee overtime payments |
Yes |
No |
|
Piece-rates – no ordinary hours of work stated (see example) |
Yes |
Yes |
|
Commission |
Yes |
Yes |
Allowances
|
Payment |
Salary or wages |
OTE |
|---|---|---|
|
Allowance that are not a predetermined amount to offset a particular expense (for example, allowances for paperwork completion) |
Yes |
Yes |
|
Allowance by way of unconditional extra payment (for example, the employee has complete discretion on whether to spend the allowance) |
Yes |
Yes |
|
Expense allowance expected to be used in full (see example) |
No |
No |
|
Danger or site allowance (these are OTE unless they are intended to offset particular expenses) |
Yes |
Yes |
|
Retention allowance |
Yes |
Yes |
|
On-call allowance outside ordinary hours of work |
No |
No |
|
Hourly on-call allowance for ordinary hours of work for doctors |
Yes |
Yes |
Expenses
|
Payment |
Salary or wages |
OTE |
|---|---|---|
|
Reimbursement of expenses, including travel costs (see example) |
No |
No |
|
Payment for unfair dismissal |
No |
No |
|
Workers' compensation – returned to work |
Yes |
Yes |
|
Workers' compensation – not working |
No |
No |
Bonuses
|
Payment |
Salary or wages |
OTE |
|---|---|---|
|
Performance bonus |
Yes |
Yes |
|
Christmas bonus |
Yes |
Yes |
|
Bonus labelled as ex gratia but in respect of ordinary hours work |
Yes |
Yes |
|
Bonus in respect of overtime only |
Yes |
No |
Leave
|
Payment |
Salary and wages |
OTE |
|---|---|---|
|
Annual leave |
Yes |
Yes |
|
Annual leave loading – clearly linked to lost opportunity to work overtime |
Yes |
No |
|
Annual leave loading – all other |
Yes |
Yes |
|
Family and Domestic Violence leave |
Yes |
Yes |
|
Sick leave |
Yes |
Yes |
|
Parental leave – e.g. maternity leave, paternity leave, adoption leave |
No |
No |
|
Ancillary leave – e.g. jury duty, defence reserve service |
No |
No |
|
Long service leave |
Yes |
Yes |
Termination payments
|
Payment |
Salary and wages |
OTE |
|---|---|---|
|
Termination payments – in lieu of notice |
Yes |
Yes |
|
Termination payments – unused annual leave, long service leave or sick leave |
Yes |
No |
Payment type examples
Example: overtime identified in award or agreement
Ennio is employed under a collective agreement that incorporates terms from an award. If there's inconsistency between the agreement and the award, the agreement prevails.
Under the award, the ordinary hours of work are 38 hours per week and the employer can require an employee to work reasonable overtime. However, the agreement provides for a shift roster in which employees work an average of 44 hours per week. The shift roster identifies the ordinary hours of work as 40 hours, with the additional 4 hours paid at a penalty rate.
The payment to Ennio for his 40 ordinary hours of work is OTE. The 4 hours of overtime payments are not OTE.
The payment for all 44 hours is salary or wages because it is a reward for his services.
End of example
Example: ordinary hours of work not stated
Kim works in a call centre. Under her contract she works a minimum number of hours per week. She also works extra shifts when needed, though there is no clear pattern to this.
There is no award or agreement that specifies Kim's ordinary hours of work, and she is not paid overtime rates for her extra shifts.
All of Kim's wages are OTE. As there are no stipulated ordinary hours of work, and no pattern of regular or usual hours, Kim's ordinary hours of work are all the hours she actually works.
All the payments to Kim are also salary or wages.
End of example
Example: piece-rates where no ordinary hours stated
Evan works as a fruit picker for Green Apples Ltd. He is paid 15 cents for every kilogram of apples he picks. There are no ordinary hours specified in any award or agreement.
Evan picks 5,000 kilograms of apples in his working hours in the week and is paid $750 by Green Apples Ltd.
The $750 paid to Evan is OTE. As his ordinary hours of work are not specified in any award or agreement, his ordinary hours of work are the hours that he actually works.
The $750 paid to Evan is also salary or wages.
End of example
Example: expense allowance expected to be used in full
Matteo is a salesman. In addition to his usual salary, he is paid $300 per month to cover expenses he is expected to incur while visiting clients, such as travel and mobile phone expenses. It is expected that Matteo will use the whole allowance in the course of visiting clients.
The $300 allowance is not OTE or salary or wages because it's not a reward for Matteo's services.
End of example
Example: reimbursement
Fernando travels by train on behalf of his employer and pays for the train ticket himself. He provides a receipt to his employer for the $14.50 cost of the train ticket, and the employer reimburses him $14.50.
The payment is not OTE or salary and wages, because it's not a reward for Fernando's services.
End of example