We'll cover when to include shift allowance in your employees salary, and how much to include.
This page covers the main rules around when shift allowance (also known as shift penalties) should be included in your employee’s super salary, and the amount that should be included.
We’ve also included a how-to guide for completing a salary review for employees who receive shift allowance.
Who do these rules apply to?
These rules apply to eligible employees who are members of CSS, PSS and PSSap—who have their salary calculated using the fortnightly contribution salary (FCS) method. You should also check your enterprise agreement, any individual agreements with employees and any remuneration tribunal decisions. This is to ensure that they don’t require shift allowance to be excluded from super salary. You should only apply the methods in this guide to shift allowance, and not to any other allowance.
Determinations and Agreements
It’s possible to specify a super salary for your employees in a number of different instruments, including:
- Enterprise agreements
- Remuneration tribunal determinations
- Individual flexibility agreements
- Workplace determinations
When a salary is validly specified this will override other rules around allowances. It is important that any variations to the rules in the Salary Regulations are clearly and expressly stated in the relevant instrument.
When to include shift allowance in super salary
Before including shift allowance in youe employee's salary on a particular day, you should check that the following two conditions have been met:
- The employee's period of membership has been greater than 12 months,
- The employee has received shift allowance on a regular basis for the 12 months immediately before that particular day.
Membership greater than 12 months
The first test that you need to look at is whether your employee’s period of membership has been greater than 12 months.
If the individual had continuous service when they started work with your organisation, this 12 month period can include time at their previous employer.
The second test that you need to look at is whether shift allowance has been payable to the employee on a regular basis – this means that shift allowance has been payable in 75% or more pay periods in the 12 months immediately prior to the date in question.
What is a 'pay period'?
Generally speaking, a pay period is the period of time beginning at the start of a pay day, and ending immediately before the start of the next pay day.
Pay periods may be shorter if:
- your employee doesn’t join on a pay day—in this case, their first pay period will be from their first day of employment to the end of the day before their first pay day.
- your employee doesn’t leave on a pay day—in this case, their last pay period will finish at the end of their last day at work.
What happens if the individual takes leave?
The 12 month period does not take into account any disregarded periods of leave.
Disregarded periods are periods of leave where shift allowance was not payable to the employee and which meet one of the two conditions below:
- Where there was more than one pay day while the individual was on leave, the period starting on the first pay day and ending on the day before the last pay day is a disregarded period of leave
- Where there was only one pay day while the individual was on leave and they return on the next pay day, the period from the pay day and the end of their leave is a disregarded period of leave.
You will need to add the length of any disregarded periods of leave to the 12 months when working out if shift allowances have been payable in 75% of pay periods.
For example, if your employee has two weeks of disregarded periods of leave, the 12 month period will actually be 12 months and two weeks long.
You should also include the following in the 12 month period:
- Any period of leave where your employee continued to be entitled to receive shift allowance
- Any pay period where your employee wasn’t entitled to receive shift allowance if that period isn’t a disregarded period of leave.
Super salary calculation
If your employee has met the eligibility criteria to have shift allowance included on a particular day, their super salary will be the lowest of A x B and C + D.
A ‘particular day’ is any day that you need to know an employee’s salary. This could be:
- the end of each pay period;
- your employee’s birthday;
- the date of exit for CSS members;
- the date of exit for PSS members (if they are exiting because of a redundancy).
It is not sufficient to only calculate the A x B and C + D on the day that your employee qualifies to have shift allowance included, or on the employee’s birthday.
The definitions of A, B, C and D are below. They differ slightly depending on whether the employee works full or part time:
|A is the highest amount of fortnightly salary paid or payable to your employee in any pay period during the 12 month period.
This includes shift allowance.
B is the number of pay periods included in the last 12 months.
|C is the annual rate of salary that would be payable to the person on the particular day if shift penalties were not included.||If your employee was a full time employee for super purposes, D is the total number of hours that attracted shift allowance in the previous year multiplied by the hourly rate of shift allowance your employee was entitled to receive on the day of the review.
If your employee was an approved part time employee at any time since the last review, you will need to multiply D calculated above by FTH/PTH
Where: FTH is the full time hours for the position
PTH is the part time hours for the position
You may find that there are a number of reductions between your employee’s last birthday review and the current review. This is because the amount of shift allowance paid and the eligibility to have shift allowance paid tends to vary from pay period to pay period.
Find out more about salary reductions for shift allowance here.
Remember that individuals whose period of membership is less than 12 months at the time of the review cannot have shift allowance included in their super salary. In these cases complete the birthday review as though they weren’t being paid shift allowance. Find out more on our Salary Maintenance page.
Next I'd like to...
As an employer, it’ is important you understand your responsibilities when it comes to your employees’ super.Learn more
Employer engagement hub
We are dedicated to helping you fulfil your super responsibilitiesLearn more
Rates & calculators
We provide you with everything you need to administer superannuation for your employeesLearn more