The Superannuation Guarantee is payable on earnings that are considered Ordinary Time Earnings (OTE)
Annual leave loading is considered OTE, unless an exception applies, so the Superannuation Guarantee is generally payable on annual leave loading.
Refer to the ATO website: https://www.ato.gov.au/business/super-for-employers/how-much-to-pay/checklist--salary-or-wages-and-ordinary-time-earnings/ and https://www.ato.gov.au/Business/Super-for-employers/In-detail/Ordinary-time-earnings/Ordinary-time-earnings---annual-leave-loading/
To Generate Correct Superannuation Guarantee Amounts on Annual Leave Loading
Set up your Annual Leave Loading as per the steps below:
- Go to Parameters > Set Parameters > Payroll > Payroll Payment and Deduction Codes (Parameter PC)
- If you have Payroll Code for Annual Leave Loading, check that the Normal Pay box is ticked.
- If you do not have a Payroll Code for Annual Leave Loading, right click > Add. Then add the code completing the relevant fields. Make sure that the Normal Pay box is ticked.
- You will need to go to File > Reset Login settings for the changes to apply
To Correct Superannuation Guarantee Amounts on Prior Annual Leave Loading Paid
If you paid annual leave loading and did not have the Normal Pay box ticked, Superannuation will not have been calculated.
To make the necessary adjustments, for each employee record, you will need to:
- Review prior entries made under the annual leave loading code
- Calculate the Superannuation amount that should have been paid
- Add a Superannuation journal to adjust the Superannuation.
- From the employee record Super Tab > Context Menu (right click) > Add
- Complete the relevant information.
- Enter the date of the adjustment, a reference and the narrative information
- Enter the amount of the adjustment: positive for an increase and negative for a decrease
- The Ordinary Pay field is for the gross amount of the leave loading component.
Note: If the superannuation journal is NOT in relation to a leave loading adjustment, the ordinary pay field can be left blank, if the ordinary pay was previously entered in the system.