Are Your Pay Categories Set Up Correctly for Superannuation?

Are Your Pay Categories Set Up Correctly for Superannuation?

Introduction

This video explains common mistakes in superannuation and how they relate to ordinary times earnings under SCHADS. It clarifies which pay categories are included in super and which are not, including expense-related allowances like tool and phone allowances. The video also explains how unplanned overtime is treated and provides practical guidance for checking payroll systems to ensure the correct super rates are applied. Viewers will learn how to identify pay categories with 0% or 12% super contributions and verify whether they are set up correctly, helping organisations stay compliant with SCHADS payroll requirements.

Key Takeaways

• Mistakes in superannuation often come from how pay categories are set up in the payroll system.
  

• Ordinary times earnings are different from awards and generally exclude expense-related allowances.
  

• Allowances for tools or phones are usually not included in super.
  

• Unplanned overtime is not included in superannuation.
  

• Checking your payroll system for pay categories and their super rates (0% or 12%) helps ensure accuracy.
  

• If a pay category’s super rate seems incorrect, research it to confirm compliance with SCHADS requirements.

Transcript

Common Mistakes in Superannuation

Most of the mistakes come from superannuation, but it's how the pay categories are set up in your system.
So the thing we've got to remember is, we're trying to achieve ordinary times earnings. It's different from awards, and it's quite a complicated area.

Understanding Ordinary Times Earnings

The way I like to think about it is ordinary times earnings are the things that usually aren't unplanned overtime. My employer tool allowance, for example, I expect them to go and buy tools with that, or a phone allowance—I expect them to spend that on their mobile phone.

So those kinds of things, we call them expense-related allowances. They're usually not included for super.

Unplanned Overtime and Superannuation

And if I work an unplanned overtime schedule, every now and then I might have to pick up an extra couple of hours at the end of my shift, and that goes into overtime.

Those things aren't included for super.

Checking Pay Categories in Payroll Systems

So the easiest thing you can do is get a list of your pay categories out of your payroll system. Try to find the ones I'm describing and just see if the super rate on them is 0 or 12%. If it's 0, just highlight them and ask yourself, does that look right? If it's 12% and you think it should be 0%, go and do some research on it.