In Department of Education (representing the State of Victoria) v Commissioner of Taxation [2026] FCA 898, Justice Button of the Federal Court of Australia ruled in favour of the Victorian Department of Education. The Court found that the annual salary loading allowance paid to government school teachers did not need to be included in the Department's superannuation calculations under the Superannuation Guarantee (Administration) Act 1992 (Cth) for any quarter between 1 April 2004 and 31 December 2022. 

The Australian Taxation Office had issued assessments requiring the Department to pay additional superannuation on the basis that the salary loading allowance, an annual payment worth 17.5 per cent of four weeks of a teacher's normal salary, should have been factored into its superannuation calculations. The Department disputed those assessments. When the ATO rejected its objections, the Department appealed to the Federal Court. 

The case turned on two distinct questions, each applying to a different period: 

Prior to 1 July 2008, whether the salary loading allowance counted as "salary" under Victorian superannuation legislation, and specifically whether it was a "recreation leave allowance" and therefore excluded. The Court found that it was a recreation leave allowance and therefore not "salary". Because teachers' annual leave is treated as taken during school holidays rather than on specific identified days, the allowance was structured differently to leave loading in other industries. The Court found this did not change its essential character as a leave allowance. 

From 1 July 2008, whether the allowance formed part of teachers' "ordinary time earnings" under the federal superannuation guarantee rules as they applied from that date. The Court found that it did not. The salary loading allowance is paid on top of teachers' base salaries; it is not payment for hours worked and so falls outside the superannuation calculation. The Court drew on the Full Court's earlier analysis in BlueScope Steel (AIS) Pty Ltd v Australian Workers Union (2019) 270 FCR 359 in reaching this conclusion. 

The Court found the ATO's assessments to be excessive for the entire period in dispute. Given that the Department employs tens of thousands of teachers, the decision has broad practical significance beyond the 18 employees whose cases were directly before the Court.

MinterEllison acted for the Department of Education representing the State of Victoria. The MinterEllison team comprised Stephen Chen, Elissa Romanin, Patrick Long, Sarah Sapuppo and James Aridas, with counsel Jennifer Batrouney AM KC and Justin Byrne appearing at hearing.