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Are You Getting Super on Your Leave loading?

Ask Your Bursar

Earlier this year the ATO refreshed its advice on the treatment of annual leave loading. This is a 17.5% loading on top of 4 weeks of annual leave pay.

Conventional accounting practice treated this in the same category as “overtime” (that is not Ordinary Time Earnings) and therefore attracted no super.

The ATO now advises that unless the leave loading is clearly replacing overtime missed during annual leave, it is Ordinary Time Earnings and super should be paid on this amount.

The IEU has approached the employer bodies with a view to ascertaining current practice and if necessary correcting practice and to claiming past underpayments if super was not being paid.

The Catholic sector replied that those schools which use Preceda for their payroll (and that is most schools) will have been paying super on leave loading already and so should have no issue.

The AIS have received advice that super is payable on leave loading but could give no indication as to previous practice and the likely response to a claim for arrears.

The Lutheran Schools Association has not yet replied.

The questions to ask are:
Do you pay super on leave loading?
If not, will you now be paying super on leave loading?
If super has not been paid in the past, how do you propose to correct the arrears?

Checkout the ATO advice for yourselves at
https://www.ato.gov.au/Business/Super-for-employers/In-detail/Ordinary-time-earnings/Ordinary-time-earnings—annual-leave-loading/