What are my superannuation obligations to an employee on termination?
The Superannuation Guarantee legislation calculates superannuation contributions based on whether the time to be paid constitutes ‘ordinary time earnings’.
A number of payments commonly made on termination will not constitute ordinary time earnings and therefore will not require the payment of superannuation. Such payments include, for example, payments for redundancy and the payment of accrued annual leave, long service leave and sick leave.
Other types of payments made on termination will constitute ordinary time earnings and thus attract the payment of superannuation. An example of such a payment includes payment in lieu of notice.
For more information about superannuation obligations please call the Ai Group Workplace Advice Line on 1300 55 66 77 or the Australian Taxation Office Superannuation Infoline on 13 10 20.
Clinton is the Publications Manager at Ai Group. He is responsible for a number of key services including Annotated Modern Awards, Workplace Relations Handbooks and the management of Ai Group’s HR and Health & Safety Resource Centres. Clinton has a Masters in Employment Relations and previously held advisory roles with the Workplace Authority and Fair Work Ombudsman.
