Article by Damian O'Connor, Special Counsel
New public ruling
The Australian Taxation Office has released a public ruling
confirming that employers do not have to make compulsory
superannuation contributions in respect of overtime payments.
The ATO accepts that it was never the intention of the law to
require super contributions on overtime amounts. The controversy
has been about the line between overtime earnings and other
"non-overtime" earnings (called ordinary times earnings)
which do require super contributions.
Whether the new ruling settles this controversy and provides
clear guidance for employers is, of course, another question.
Background
The Superannuation Guarantee legislation requires employers to
provide a minimum level of superannuation support for employees
calculated by applying a contribution percentage (9%) to the
employee's ordinary times earnings. Prior to 1 July 2008 the
percentage contribution rate was, in some cases, applied to
