I recently emailed my previous superannuation blog to one of my colleagues to review. He's a very skilled Industrial Agent and highlighted a common mistake that businesses make with overtime and superannuation. So what is this mistake? Employers INCORRECTLY paying superannuation on employee's overtime. There is actually no superannuation payable on overtime!
The super guarantee, which is increasing from 9% to 12% over the next couple of years, is only paid on ordinary time earnings.
Ordinary time earnings include over-award payments, commissions, shift-loading, allowances and bonuses.
What most businesses don't realise is that payments for work performed outside an employee's ordinary hours of work (overtime) are not ordinary time earnings.
So if you're a business owner, and money is tight enough just trying to cope with the overtime rates of pay, double check your payroll to make sure you are paying superannuation correctly.
If you have overpaid on superannuation, then you are able to call up the super fund, explain the situation and they may be able to refund the amount overpaid. If you are a business that has been paying super on overtime than its probably a good time to review who you are getting tax and employment advice from.
If you're unsure whether you are paying superannuation correctly, I am able to do a complimentary payroll check for your business. Contact me by email or on Twitter if you're interested in taking up this offer. Email admin@flindersaccounting.com for your free superannuation review.
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