Super
Qualifying Earnings vs OTE: Every Pay Item That Changed (Commissions Included) — 1 July 2026
From 1 July 2026, payday super is calculated on Qualifying Earnings, not OTE-per-quarter — but what counts as OTE hasn't changed. A plain-English lookup of which pay items are in (all commissions, salary sacrifice) and which are out (overtime), so you can map your pay codes correctly.
If you're mapping your pay codes for payday super, this is the page you want open. From 1 July 2026, super is calculated on Qualifying Earnings (QE), not OTE-per-quarter — but here's the reassuring part most coverage buries: what counts as OTE hasn't changed. QE simply takes OTE and adds a couple of specific items. This guide is the plain-English lookup: what's in, what's out, and the pay items that actually changed.
General information only — not financial, tax, superannuation, or legal advice. If a pay item is borderline, confirm it with the ATO (ato.gov.au) or a registered tax or BAS agent before acting.
The one-paragraph version
Qualifying Earnings = OTE + all commissions + salary-sacrificed amounts that would have been QE. Overtime stays out (where ordinary hours are clearly identified). The calculation moves to each payday instead of per-quarter, and it applies the legislated 12% rate. The ATO's explaining qualifying earnings resource and its page on what payments are qualifying earnings are the references.
Pay-item lookup: in or out of Qualifying Earnings
Use this to walk your pay codes. "In" means the item is Qualifying Earnings and attracts 12% super each payday; "out" means it doesn't.
| Pay item | In or out of QE? | Notes |
|---|---|---|
| Ordinary hours pay | In | Core OTE — unchanged |
| Certain paid leave (e.g. annual leave taken) | In | Part of OTE — unchanged treatment |
| Allowances (that are OTE) | In | Where the allowance forms part of OTE — unchanged |
| Bonuses (that are OTE) | In | Where the bonus is OTE — unchanged |
| Lump sums (that are OTE) | In | Where they form part of OTE — unchanged |
| All commissions | In | Now explicitly included — even commissions solely for work outside ordinary hours |
| Salary-sacrificed amounts (that would have been QE) | In | Now included so sacrificing doesn't shrink the QE base |
| Overtime | Out | Not OTE and not QE, where ordinary hours are clearly identified in the award/agreement |
The two rows that change real-world payroll most are commissions (now always in) and salary sacrifice (now captured) — and the one that protects you from over-paying is overtime (still out, provided your records clearly identify ordinary hours).
The three items that actually changed
1. All commissions are now in
Previously, the OTE treatment of some commissions could be debated. Under QE, all commissions are included — including those earned solely for work outside ordinary hours. If you pay any kind of commission (retail sales, hospitality, services), confirm your payroll attaches super to every commission line from 1 July 2026.
2. Salary-sacrificed QE amounts are captured
Salary-sacrificed amounts that would otherwise have been Qualifying Earnings are included in QE. The effect: an employee sacrificing salary into super no longer reduces the base your employer super is calculated on.
3. Overtime stays out — but only if ordinary hours are clear
Overtime is not OTE and not QE — where the ordinary hours are clearly identified in the award or agreement. The conditional matters: if your timesheets and pay setup don't clearly separate ordinary hours from overtime, that line can blur. Make sure ordinary hours are clearly identified so overtime is cleanly excluded.
How to map your pay codes (a short method)
- List every active pay code in your payroll system.
- Tag each one against the lookup table above — in or out of QE.
- Flag commissions and salary-sacrifice codes specifically and confirm super is applied.
- Confirm overtime codes are excluded and that ordinary hours are clearly identified for affected staff.
- Run a test pay and check the super figure equals 12% of the QE lines only.
That last step doubles as part of your dummy run before 1 July 2026.
Why this matters for the deadline and the cash
Getting QE right isn't just accuracy for its own sake — under-counting QE means under-paying super, which can put you into the new Super Guarantee Charge even if you paid "on time." And once your QE base is correct, the free cashflow calculator turns it into your super-per-payday and the working-capital timing shift.
Where to go next
- See your numbers → Payday Super cashflow calculator (free, no email)
- Check you're ready → Am I ready for payday super? The 12-point check
- Know the penalties → The new SG charge, 60% uplift and penalties
- Read the full guide → Payday Super: the complete employer guide
General information only, current as at 8 June 2026, based on ATO published guidance — not financial, tax, superannuation, or legal advice. The pay-item treatments here are based on published ATO guidance which can be updated before 1 July 2026; for any borderline item, confirm against the ATO's explaining qualifying earnings resource and a registered tax or BAS agent before acting.