17 October How cashing out annual leave can impact super contributions October 17, 2017 By Reef Admin Leave provisions 0 Do you need to include the cashed out portion of annual leave in an employee's ordinary time earnings for the purpose of calculating superannuation guarantee contributions? In August 2016, the Fair Work Commission decided to vary Modern Awards to provide the opportunity for employees to cash out “excessive” accrued annual leave. The decision affects real estate employees covered by the Real Estate Industry Award 2010 or the Clerks – Private Sector Award 2010. For a variety of reasons, the cashing out concept is growing in popularity. But there is some confusion about the impact of cashing out annual leave on superannuation guarantee contributions. SGC Ruling 2009/2 states that “lump sum arrears payments of unused leave or salary or wages otherwise than on termination of employment are also ordinary time earnings”. So yes, you do need to include the cashed out portion of annual leave in an employee’s ordinary time earnings for the purpose of calculating superannuation guarantee contributions. This is compared to the situation where the payment of unused leave on termination is excluded from the definition of ordinary time earnings for superannuation guarantee contribution purposes. Related Changes to annual leave provisions now in play In an important decision by the Fair Work Commission, annual leave provisions in modern awards have been varied to provide greater administrative flexibility. The changes apply from the first pay period on or after 29 July 2016. Domestic violence leave now available to employees From 1 August 2018, all employees covered by modern awards have access to family and domestic violence leave. Here's what you need to know. Managing employee leave applications Do employers have a legal right to require employees to complete a leave application form each time they seek leave? Medical certificates and personal leave policies Can a personal leave policy insist that employees provide a medical certificate as proof of illness or injury? And if it does, is the policy compliant with the Fair Work Act 2009 and modern awards? Doctor, give me the news: Employee entitlement to personal/carer's leave It’s not uncommon for an employee to ask for a few hours off to visit their GP or attend a specialist medical appointment. They’re not sick, but there’s something they need attended to. Are they entitled to personal/carer’s leave? Can an employee cash out their long service leave? It's a common question. REEF often receives calls asking about an employee's ability to cash out an amount of accrued long service leave. But can they? Senior Workplace Relations Advisor Laura Clark explains. Comments are closed.