You must pay super on an employee's ordinary time earnings.
Super obligations apply to:
'on call' allowances paid for ordinary hours of work, such as an 'on call' loading.
Super obligations do not apply to:
expense allowances and reimbursements. These are not 'salary or wages' and therefore aren't ordinary time earnings.
'on call' allowances paid when employees are required to make themselves available during hours they aren't otherwise working. These are excluded from ordinary times earnings.
Expense allowances and reimbursements
72. Expense allowances, that is, those allowances paid to an employee with a reasonable
expectation that the employee will fully expend the money in the course of providing services, are not
'salary or wages'.
Vocab
expend
/ɪkˈspɛnd,ɛkˈspɛnd/
Learn to pronounce
verb
spend or use up (a resource such as money or energy).
"the energy expended in sport could be directed into other areas"
Superannuation on Car Allowances
Under Superannuation Guarantee Ruling 2009-2 most allowances are liable for super unless the ATO
has determined that an exemption applies.
In relation to allowances one exemption relates to allowances for work related expenses that are
expected to be fully expended by the employee. Car allowances sometimes fall into this category.
However you need to look at your organisation’s allowances before you decide super is NOT
payable. For instance, if the employer pays a fixed car allowance with no calculation for business
usage costs (most common), superannuation must be paid as the employer cannot justify to the ATO
that the allowance was designed to be fully expended.
Here are some scenarios of car allowances that are NOT superable.
If a car allowance is paid by reimbursing cents per km allowance, this is not liable for super
guarantee.
If a fixed car allowance is paid, that has been calculated on the estimated business related
travel costs for the employee’s car, there is no super guarantee liability.
The employer would have to have an audit trail of how the allowance was calculated. They would
need to estimate the expected kilometres to be travelled for the year and determine the reasonable
costs per km of the employee’s vehicle. This could be done using sources such as NRMA, RACV or
similar organisations.
The employer might document the estimate and arrive at, say $9,250 operating costs for the car for
the year (for business related travel only). If the employer chooses to pay a car allowance of $9,250
in those circumstances, the Super Guarantee Act would deem the allowance a ‘reimbursement of
expense’ and it would not be liable for super. The calculation does not have to be lodged with the
ATO – the employer just needs to keep the calculation available in case of ATO audit.
Ref:
http://www.icb.org.au/out/?dlid=33618
(At my work, super is not paid on car allowance. However, super is paid on bonus.
As per ATO's table below, super has to be paid on performance bonus it seems as it is classified as OTE, ordinary time earnings.
List of payments that are ordinary time earnings
This page shows which payments to employees are counted as ordinary time earnings (OTE), and which are counted as salary and wages for super guarantee purposes.
As an employer, you use:
OTE to work out the minimum super guarantee contribution for your employees. OTE is the amount you pay employees for their ordinary hours of work, including things like commissions and shift loadings.
salary and wages to work out the super guarantee charge. You only need to do this if you missed paying the minimum super guarantee contribution by the due date. Salary and wages are similar to OTE but also includes any overtime payments.
