Under the Superannuation Guarantee Contribution rules, an employer’s superannuation liability is based on the employee’s notional earnings base. Where there is no acceptable earnings base, OTE is used as a default earnings base. Ordinary Time Earnings (OTE) is defined at the earnings an employee receives on a regular basis.
OTE includes payments such as wages for ordinary hours of work, remuneration while on annual, long service or sick leave, allowances, and some bonuses.
OTE excludes payments such as overtime payments, Christmas bonuses, payments in lieu of notice, some redundancy payments, lump sums paid for accrued leave on termination of employment, and payments when on maternity or paternity leave.
The above is only a partial listing of inclusions and inclusions. For the complete listing and explanation, obtain a copy of ATO Ruling SGR 94/4 – Superannuation Guarantee Ruling – Ordinary Time Earnings. You can obtain this online from the ATO Legal Database at the following website:
http://law.ato.gov.au/atolaw/index.htm