🎁 Loyalty Bonus & Superannuation — Explained Simply 💡 What Is a Loyalty Bonus?
🎁 Loyalty Bonus & Superannuation — Explained Simply
💡 What Is a Loyalty Bonus?A loyalty bonus (or service award) is money an employer gives to an employee to thank them for their long service or loyalty — for example, after 5 or 10 years at the company.
🏦 Does Super Apply to a Loyalty Bonus?
✅ Usually, yes.If the bonus is paid for your regular work or years of service, it counts as part of your ordinary time earnings (OTE) — meaning your employer must pay super on it.
🚫 Not always.If the bonus is paid only for overtime work or extra duties outside normal hours, it may not attract super.
👉 From 1 July 2025, employers must pay 12% super on all eligible earnings, including most loyalty or service bonuses.
🧾 How It Affects Your Tax ReturnFor Employees
Your loyalty bonus is counted as taxable income and appears on your income statement (PAYG summary).The super contribution your employer pays doesn’t get taxed as income — it goes straight into your super fund.You’ll see it on your super fund statement and it helps grow your retirement savings.For EmployersSuper must be paid on the loyalty bonus if it’s part of OTE.Missing or late payments can lead to ATO penalties and Super Guarantee Charge (SGC).Always record the reason for the bonus and how it was calculated for compliance.
Example:An employee gets a $2,000 loyalty bonus in June 2026 for 5 years of service.It’s paid for general service → so it’s ordinary earnings.Employer pays 12% super = $240 into the employee’s super fund.The $2,000 appears in the employee’s income for tax, but the $240 goes to their super account.
Pay and record bonuses clearly — state if they relate to ordinary hours or overtime.Check that 12% super is paid on eligible bonuses.Employees: review your income statement and super balance each year.Employers: use the ATO super calculator to stay accurate and compliant.
If a loyalty bonus rewards your normal work or years of service, it does attract super.It also counts as taxable income for the employee.Keeping your records clear and paying super on time helps everyone stay ATO-compliant and stress-free.
