How much superannuation are you entitled to earn? Many shift workers are concerned about the components of their ‘Super fund salary’ from their employers; whether it should include both base and shift loading salaries. In most cases, employers pay super fund salary for both base and shift loading salaries, but only the base component is used to calculate life insurance and income protection.
How much superannuation are you entitled to earn?
Australian Superannuation Guarantee
Superannuation Guarantee (SG) laws require employers to pay to a super fund, the equivalent of 9.5 per cent of what an employee receives from ordinary time earnings (OTE), which is what an employee earns for their normal hours of work, including over-award payments, shift or casual loading if any, commissions, allowances and performance bonuses. (An ‘employee’s ordinary hours of work’ are his/her ordinary hours of work under the award or agreement, or the combination of documents, which govern that person’s conditions of employment.)
Australian Super Fund Salary
An average salary is used in some public sector funds for this calculation, which means the ‘super fund salary’ in such institutions could be different from an individual’s actual salary. Generally, super funds include total income (including salary sacrificed contributions and even regular overtime) as ‘salary’.
Those employees whose base salary only is included in the super fund are advised to check with their employers whether the relevant paperwork sent to the super fund hasn’t been updated. As a next step, they can check with their super fund about the definition of ‘salary’ for the particular fund’s income protection insurance, and life insurance, and whether it includes shift loading, which should correctly be included in the super fund.
The majority of super funds allow individuals to opt for additional income protection cover or life insurance cover, with the inclusion of additional information, and normally after undergoing a medical exam.
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