Your OTE Quick Check answers
Is your Super Guarantee contribution set to Type = % of OTE (Ordinary Time Earnings) and is Use Employee Other Accounts ticked?
|Do you use third-party software to calculate Super Guarantee contributions?||No|
How many Super Guarantee contributions are you using?
|One or more*|
* multiple Super Guarantee contributions set up for different Super Guarantee calculations.
You need to review your pay elements and update your Super Guarantee contribution(s).
Carry out these tasks
These are described below or you can download the PDF version (at right).
You may wish to contact your Attaché consultant to assist with these tasks.
Ensuring correct Ordinary Time Earnings (OTE) pay elements
When calculating your Super Guarantee obligation, you must consider the whole of an employee’s Ordinary Time Earnings (OTE). This topic describes how to determine the payments that contribute to OTE and how to check and update your pay elements, if required, to ensure your OTE calculations are correct.
Identifying the pay elements to include in OTE
For general guidance on which payments are considered salary or wages and whether they are considered part of ordinary time earnings (OTE) for super guarantee purposes, talk to your advisor or visit the Australian Taxation Office website: Checklist: Salary or wages and ordinary time earnings
Reviewing your pay element setups in Attaché Payroll
Once you've established which payments contribute to ordinary time earnings, you need to check whether your pay elements (income types, allowances and deductions) are set up correctly for OTE. If you have more than a handful of pay elements, the easiest way to do this is by using the List Wizard to create a report.
For example, to review your income types:
- Choose Setups | Payroll | Income Types | Maintain.
- Choose Find (F2) followed by Output (F11) to open the List Wizard.
- In the column heading area of the report, locate the inclinote column. The Y or N (Yes or No) flag in this column shows whether the Include in OTE check box has been selected for a pay element. If you can't see this column then choose Add Columns, select it from the list of fields and double-click to add it to the report.
- Review the report and for each income type that is to be included in OTE, check if the OTE flag is set to Y. Make a note of any income types that are not set up with the correct OTE flag, as you'll need to update these (as described below).
Updating your pay elements (if required)
If you've identified any pay elements that have not been correctly flagged as OTE, follow these instructions to update them:
- In Setups | Payroll | Income Types | Maintain and Setups | Payroll | Allowances | Maintain, select the Include in OTE check box if an income type or allowance is to be included as income for the calculation of the SG contribution.
- In Setups | Payroll | Deductions | Maintain, if a deduction is to reduce the employee's income for the calculation of the SG contribution, set the Part of OTE check box to Yes.
For example, assuming an income of $1,000, allowances of $200 and a deduction of $350, superannuation will be calculated on an amount of $850 (that is, $1,000 + $200 - $350). If the percentage set in Deduction Maintenance (or Employer Contribution/Super Maintenance) is 9.5%, then the deduction (or contribution) will be 9.5% of $850, which equals $80.75.
In Income Type Maintenance and Allowance Maintenance, select the Include in OTE check box to include the pay element as income for the calculation of OTE
In Deduction Maintenance, set the Part of OTE check box to Yes if the deduction is to reduce the employee's income for the calculation of OTE
REF: A000795, SF 4101
Changing your employer Super Guarantee setups to % of OTE (Ordinary Time Earnings)
When calculating your Super Guarantee obligation, you must consider the whole of an employee’s Ordinary Time Earnings (OTE). If your employer Super Guarantee contribution is not set up to calculate on OTE (for example, you may be using % of Calculated), you'll need to change it..
If you have set up more than one employer Super Guarantee (SG) contribution (for example, you may be paying additional SG for some staff or you may have casual staff under 18 years of age who are on a different rate), you'll need to repeat these steps for each contribution.
To change your employer Super Guarantee contribution to % of OTE (Ordinary Time Earnings):
- Choose Setups | Payroll | Employer Contributions | Maintain.
- In the Contribution Code field, select your employer Super Guarantee code.
- In the Type field, select % of OTE (Ordinary Time Earnings).
- Select the Use Employee Other Accounts check box.
- Choose Accept (F9).
You have now updated your employer SG contribution.
Reconciling your Super Guarantee calculations
If you've made changes in Employer Super/Contribution Maintenance or you've updated your pay elements, prior to processing your next pay run you should reconcile the Payroll | Reports | History | Pay Details report to your Payroll | Process Payroll | Pre-Process Reports| Pay Details report to ensure the Superannuation Guarantee is calculating correctly for each employee, based on their ordinary-time earnings.
To produce the Pay Details History report:
- Choose Payroll | Reports | History | Pay Details.
- On the Options tab:
- Select the required Pay Frequencies
- Set the Date Range check box to Yes
- In the First Date and Last Date fields enter the last processed pays' Date Paid date
- Select the Date Paid option
- Select the Report Options as shown below
- In Itemise Totals, set the Contributions check box to Yes.
Now use the details from this report to reconcile with the Payroll | Process Payroll | Pre-Process Reports| Pay Details report.
The Pay Details History report shows the details for each processed pay for each employee, including the SG contribution
If you find any discrepancies in the super calculations when reconciling the two reports, this may be due to:
- Incorrect pay elements: the Include in OTE or Part of OTE check box has not been selected. In this case, identify and update the pay elements (as per the instructions above), then uncheck and re-check the pays. Re-run the Payroll | Process Payroll | Pre-Process Reports| Pay Details report and reconcile against the Pay Details History report to confirm that the super calculations are correct.
- Your previous superannuation setup was not calculating SG contributions based on the correct pay elements. In this situation, you may wish to calculate the outstanding SG amount and process an adjustment pay.
If you haven't already, take the OTE Quick Check to see if you are set up to report Ordinary Time Earnings (OTE) correctly for Single Touch Payroll.
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