There are other payments employees might receive, paid as lump sum payments rather than at each regular pay period, as is the case for salary and wages:
- Bonuses and Commissions
- Directors' Fees
- Back Payment
- Return to Work Payment
Yes, if the payment is considered as ordinary time earnings payment, if not such as overtime, then super does not apply.
Yes, the sacrifice is considered as Voluntary which means it has to be reported under the Employee's Salary Sacrifice and the Employer Reportable Super Contribution (RESC).
These payments are taxed as per NAT 3348 Tax table for back payments, commissions, bonuses and similar payments - Method B(ii), unless the employee has a tax treatment arrangement that overrides this payment-specific tax table, such as for Working Holiday Makers. Directors' Fees are taxed using the same tax table applicable to salary and wages
Bonuses and commissions
Typically paid as lump sum payments rather than at each regular pay period:
- Bonuses – usually made to an employee in recognition of performance or services and may not be related to a particular period of work performed
- Commissions – usually made to an employee in recognition of performance or services and may be calculated as a portion of the proceeds or volume of sales
If the bonuses or commissions are paid in respect of overtime, it should be reported as part of the employee's regular pay "overtime", it should not be reported as bonus or comission!
Payments to the director of a company, or to a person who performs the duties of a director of the company.
Directors' Fees may include payment to cover travelling costs, costs associated with attending meetings and other expenses incurred in the position of a company director.
Directors' Fees are ordinary time earnings and tax is to be withheld using the same tax table applicable to salary and wages.
When a payment does not qualify to be paid as Lump sum E, less than lump sum E threshold ($1,200) or paid in less than 12 months of the date of payment, then you must create one of the following:
- Back payment where the payment is considered to be an ordinary time earnings, or
- Back payment (Overtime) where the payment is not an ordinary time earnings.
Return to work payment (Lump Sum W)
A return to work amount is paid to induce a person to resume work, for example, to end industrial action or to leave another employer. It does not matter how the payments are described or paid, or by whom they are paid. These types of payments, to induce workers to return to the workplace, cannot be classified as Payment Type – Bonuses or Commissions or Lump Sum Type-E but must be reported as Lump Sum W amounts. There are no arrears tax offsets available to the employee in their IITR for lump sum type-W payments
Recording a Payment
- Access the Other Payments from the application menu
- The other payment window appears
- Select the required employee
- Select the payment type
- For Directors' Fees payment, enter the number of weeks representing this payment
- Enter the taxable gross
- If you want to withhold more or reduce the tax withheld, enter the Additional Tax amount
- If there is a voluntary salary sacrifice super, enter the salary sacrifice amount
- Select Yes for ordinary time earnings payments, No for non-ordianry time earnings payments
- Enter the payment date
- Click Save
Depends on the selected payment type, some fields might be disabled such as when selecting an Overtime back payment.
For Directors' Fees, you must enter the correct number of weeks representing this pay in order to correclty withheld the required tax amount!
If you set the OTE Payment to Yes, the super entitlement will be added.