Working Directors are a special category of employee in the Scheme and the definition of “Ordinary Rate of Pay” creates complexities regarding the treatment of Working Directors.
The contribution rate is based on the ‘ordinary rate of pay’ paid to an employee for ordinary hours of work.
For Working Directors, the ‘ordinary rate of pay’ is the rate of pay being received by Directors as employees of their firm. This would be the amount that they receive as wages on a defined, regular, at least monthly basis, that they pay tax on a Pay As You Go (PAYG) basis, have wage records for (pay slips), can present an ATO payment summary at the end of each financial year, and evidence regular payment of wages from the business bank account into their personal bank account.
One off adjustments during or at the end of the financial year are not included, nor can they be averaged out over the year.
Working Directors who do not receive a regular wage cannot then meet these requirements and their status in the Scheme is in doubt.
Working Directors who are in this situation or are unsure of these arrangements should contact MyLeave to discuss the matter.
Quarterly Returns are only to record service days when Working Directors are on site and working in a prescribed classification.