The ATO has released guidance that will mean SGC super will need to be paid on Annual Leave Loading in a lot of cases.
This is a new treatment, and your payroll software is probably set-up to not calculate super on Leave Loading. If you are unsure whether this treatment will apply to you, we recommend you update your payroll setup so that SGC is calculated on the full amount of leave.
There are circumstances where the ATO will accept that SGC is not payable on leave loading. To take advantage of this, you will need to be able to point to an award or a written agreement that specifically states that the Leave Loading amount is to compensate for a notional loss of opportunity to work overtime. Any agreement or policy needs to reflect the mutual understanding of both parties.
This could be a complicated process. You may prefer to take the safer course of action and pay the additional SGC. It will work out to be a bit over $1.66 for every $100 of leave taken.
If you do want to investigate whether this changed treatment will apply to your business, contact us today.