ARTICLE · 03 APRIL 2019

Superannuation Guarantee And Annual Leave Loading

Herbert Smith Freehills Kramer LLP

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The ATO's position has historically been that annual leave loading was not earnings in respect of ordinary hours of work, or ordinary time earnings (OTE) ...

AustraliaEmployment and HR

Historical ATO approach to annual leave loading and the superannuation guarantee

The ATO's position has historically been that annual leave loading was not earnings in respect of ordinary hours of work, or ordinary time earnings (OTE), and that accordingly superannuation was not payable in respect of such earnings.¹ This position was changed in 2009 – annual leave loading was earnings in respect of ordinary hours of work, however with one exception: the ATO recognised that annual leave loading payable under some awards and industrial agreements was not OTE if demonstrably referable to a notional loss of opportunity to work overtime.² The ATO made private rulings in 2014 and 2017 to this effect.³

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