Changes to the superannuation guarantee (SG) contribution legislation, which took effect on Tuesday, 1 July 2008 affect the way in which superannuation guarantee contributions are calculated by employers. 
 
Previously, employers were required to make minimum SG contributions of nine per cent of each employee’s notional earnings base, as defined under an applicable award. 
 
However from Tuesday, 1 July 2008, employers must make minimum SG contributions of nine per cent of each employee’s ordinary time earnings (OTE). For members currently using an earnings base for calculating SG contributions that are less than the OTE definition, this may result in increased superannuation costs to the employer. 
 
OTE is defined as the total of an employee’s earnings in respect to ordinary hours of work. Importantly, this includes over-award payments, shift-loadings and commission. OTE does not include lump sum payments in lieu of unused sick leave, annual leave or long service leave made to an employee on termination of employment or earnings in excess of the maximum superannuation contribution base. 
 
Members are encouraged to ensure their clients who have SG obligations for their employees are aware of these changes.  
 
A list of the tools released by the Australian Taxation Office (ATO) to help members understand the changes include:

• The superannuation guarantee eligibility decision tool which helps employers determine workers’ eligibility for contributions under the superannuation guarantee law
• The superannuation guarantee contributions calculator that helps employers work out the amount they need to pay each quarter.

• ATO website: superannuation guarantee eligibility decision tool
• ATO website: superannuation guarantee contributions calculator
• Institute website: superannuation pages