Are Bonus Payments Considered 'Ordinary Times Earnings'?
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Times Earnings' is the method that must be used to calculate the
minimum superannuation guarantee contributions for employees.
- Ordinary times earnings is defined under superannuation law as
generally being what an employee earns for their ordinary hours of
- over-award payments,
- allowances, and
- paid leave.
- In the recent case, the AAT found that the superannuation
guarantee Charge applied to performance-based bonus payments made to
various employees of a debt recovery business.
- In making its decision, the AAT said that although a
satisfactory level of performance was required to be eligible for the
bonus, it was still regarded as part of an employee's salary.
- The AAT also found that the nature of the bonus payments was
related to the employees ordinary hours of work, i.e., the payments
were based on the work performed during an employee's ordinary work.
- As such, the AAT found that the bonus payments were within the
definition of "ordinary times earnings", and should have been included
when calculating the superannuation guarantee charge for employees
receiving the bonus.
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