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15 Jun 09 Changes to the meaning of "ordinary time earnings" and "salary or wages"

The ATO has advised that from 1 July 2008, employers have been required to use "ordinary time earnings" (OTE) to work out their employees’ minimum superannuation guarantee (SG) contributions. Because of this law change and other changes over the last 15 years, superannuation guarantee rulings SGR 94/1 (Earnings bases), SGR 94/4 (Ordinary time earnings) and SGR 94/5 (Salary or wages) are no longer current.

A new ruling (SGR 2009/2) about categorising different payments as "ordinary time earnings" and "salary or wages" will replace SGR 94/4 and SGR 94/5. This ruling is entitled Superannuation guarantee: meaning of the terms "ordinary time earnings" and "salary or wages" and includes easy-to-follow examples.

The ruling was released on 13 May 2009. It will be effective from 1 July 2009. SGR 94/4 and SGR 94/5 will be withdrawn from 1 July 2009. (Note: SGR 94/1 was withdrawn on 30 July 2008).

For a copy of the ATO advice, go here

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