Superannuation on termination payments

The following illustrates which payments are normally treated as Ordinary Time Earnings for superannuation purposes (NOTE: the rules change if your super payment is late!):

  • Unused leave paid in lump sum: No
  • Pay in lieu of notice: Yes
  • Redundancy (severance): No
  • Ex-gratia: No
  • Flex time: Yes
  • RDO's: Yes
  • Time off in lieu of overtime: No

Please make sure you also check your employee's award or Enterprise Agreement (and any other legislation) for more beneficial conditions.

We strongly advise you to seek advice from an employment specialist, as getting it wrong can have serious consequences. We also recommend membership of TAPS (payroll.com.au) who regularly run courses related to all payroll legislation. 

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