Bonus & Comission Payments

Since the introduction of STP Phase 2 reporting, Bonuses and Commissions need to be created as Earnings Types in Marlin HR (not as Allowance Types) with the $Amount option selected so that they can be entered as dollar amounts on the payrun instead of numbers of hours by an hourly rate.

Select System > Earnings from the menu and if they do not already exist, add them with details as shown below.

Are Bonuses & Commissions OTE?

Many employers are unsure of whether Bonuses and Commissions are considered Ordinary Time Earnings (OTE) by the ATO and therefore included in the Superannuation Guarantee calculation.

According to the ATO website:

If the bonus is a reward for achievements during an employee’s ordinary time hours, then the bonus sum incurs the usual superannuation guarantee requirements.

This is the case for the majority of bonus payments made to employees under a salary agreement.

However, if the bonus is linked to a specific project or performance that is wholly outside of the employee’s ordinary hours, then Superannuation Guarantee payments are not necessary.

For example, if the employee takes it upon themselves to develop an internal program without direction from management and this is deemed an extraordinary effort that deserves a bonus as reward, these monies would not be counted as part of the company’s superannuation contribution burden.

Add to an Employee as a Recurring Earnings Type

To add a Bonus or Commission as a recurring earnings type so that you don't need to manually add it on the payrun, open the employee in Employee Maintenance and go to the Pay Details tab.

Click on the Add button below the Recurring Earnings section and add the Bonus and/or Commission as required.

If the amount is not payable every payrun or varies in amount, it is best to enter it as $0 and then enter the amount on the payrun when it is payable.