Ordinary time earnings (for Super guarantee purposes)

The Tax Office has released a Draft Superannuation Guarantee Ruling in which it states the Commissioner’s preliminary view on whether payments to employees are ordinary time earnings (OTE) and/or ‘salary or wages’.

Since 1 July 2008, employers are required to use OTE in calculating the superannuation guarantee (SG) for their employees.

If employers provide less than the required SG or pay the SG late, they will be liable to pay a non-deductible SG charge which is calculated using salary or wages.

While the Draft has not significantly departed from the Commissioner’s established view, his view relating to certain payments appears to have changed.

The Draft states that Christmas bonuses do not form part of salary or wages. However, the Commissioner currently considers these bonuses to be included in salary or wages.

The Draft also states that maternity leave and jury duty leave payments are OTE. Currently, the Commissioner considers that these leave payments do not form part of OTE.

Financial literacy program for school kids

ASIC has launched a new financial literacy program Your Money Starter- Insurance and Super designed to assist young Australians in making decisions about insurance and superannuation.

your money starter header image
It is a resource for secondary schools in each state and territory and is currently being distributed to every high school in the country.

“Young Australians who understand insurance as a way to protect their assets and superannuation as an effective way to save for retirement will get a head start on two key areas of personal finance”, Superannuation and Corporate Law Minister Nick Sherry said

“Your Money Starter includes a variety of innovative classroom materials, activities and multimedia elements designed to make learning about financial services relevant and attractive to teenagers,” ASIC chair Tony D’Aloisio said.

The materials are available in hard copy and on CD-ROM and can be downloaded, free of charge, from ASIC’s consumer website, FIDO, at www.fido.gov.au/yourmoneystarter.