Whether superannuation guarantee (SG) had to be paid in respect of annual leave loading was a confused issue. In early 2019, the ATO clarified its position by confirming that annual leave loading will be ordinary time earnings (OTE) unless there is written evidence clarifying the reason for the loading and that it is referrable to a lost opportunity to work overtime.
If annual leave loading hasn’t been included as OTE in previous superannuation self-assessments, employers should consider reviewing previous quarters to determine whether they have evidence of the purpose of the loading; otherwise, they may be liable for the SG charge.
On 6 March 2020, given the confusion, the ATO introduced a SG amnesty to eligible employers. This amnesty allows eligible employers to disclose and pay previously unpaid SG charge without penalty. To apply for amnesty, the employer must lodge a completed SG amnesty form with the ATO no later than 7 September 2020. For more information about the SG amnesty visit the ATO website.
If you are unsure whether SG is payable on annual leave loading contact us. We can help. Our business is protecting yours.