Super contributions are calculated on 9% of Ordinary Time Earnings (OTE).

The definition of OTE is found in subsection 61(1) of the Superannuation Guarantee (Administration) Act 1992. It includes all payment for work done in ordinary hours, including shift penalties, weekend penalties, casual loadings, over-award payments, top-up workers’ compensation payments when on light duties and bonuses paid in respect of ordinary hours of work.

OTE does not include overtime payments, make-up pay while absent on workers’ compensation, expense reimbursements and fringe benefits, payment while on jury service or parental or any other absence where the payment is not accrued during ordinary hours of work, redundancy pay and ex gratia bonuses.

The definition operates as a default. That is, where an award, agreement, superannuation trust deed or law prescribes an earnings base, that definition will apply if it was in operation prior to 1991. This allows some employers to avoid paying SG on some or all of over-award payments, shift and weekend penalties and casual loadings. It is a particular issue in the mining industry, and also affects public and private sector workers in Queensland, as well as some members of corporate funds. Parliament recently legislated to remove this loophole by 2008.

Some awards and agreements provide for superannuation to be paid in circumstances where this is not required by the legislation: for example, during a period of paid parental leave or during an absence when the worker is receiving accident make-up pay. In these cases, the SG must be paid on those amounts.