On 1 July 2014, the statutory employer superannuation contribution technically known as the Superannuation Guarantee will increase by 0.25 per cent to 9.5 per cent. This figure is then applied to employees’ ordinary time earnings. The ATO’s web site has a dedicated and very useful explanation and guidance notes as to what this means.
I have recently been asked by an employer whether this increase can be absorbed into employees’ over award entitlements. The answer is found in an employee’s employment contract.
Obviously if the contract entitles an employee to salary plus superannuation, the increase cannot be absorbed into the non-superannuation earnings. However, where a contract refers to an earnings sum (say a package of $100,000) it is implicit that the increase could be absorbed.
The issue will be resolved by applying ordinary principles of interpretation to the contract of employment.