Guidance on super guarantee leave loading

The ATO recently updated its guidance on how to treat super guarantee on leave loading for your employees. It is the ATO’s view that in some circumstances annual leave loading is considered a part of ordinary time earnings (OTE), which is used as a basis for employer super contributions.

If you have previously self-assessed on the basis that your employees’ annual leave loading is not OTE, there is a risk of superannuation guarantee (SG) shortfalls and liability for the SG charge. You may be required to lodge a Super Guarantee Charge statement with us if you think you have SG shortfalls for past quarters.

In general, our compliance resources won’t be directed to look at the past history of NFPs to scrutinise the purpose for which annual leave loading was paid, if:

  1. you self-assessed that annual leave loading was not OTE (as it was in place of the opportunity to work overtime), and
  2. There is no evidence (that is less than five years old) that suggests the entitlement was for something other than overtime.

To view further information from the ATO, click here.

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