Payroll & super
Ordinary Time Earnings
Ordinary Time Earnings (OTE) is the earnings base the Super Guarantee is calculated on: what an employee earns for their ordinary hours of work, including commissions, shift loadings, most allowances and paid leave, but generally excluding overtime. Employers must pay 12% super on OTE, so classifying payments correctly decides whether super is right.
OTE is defined in the superannuation guarantee legislation and interpreted in ATO ruling SGR 2009/2. The anchor concept is ordinary hours of work: the hours fixed by the award, agreement or contract. Everything earned in respect of those hours is OTE, which sweeps in more than base salary: over-award payments, commissions, shift and casual loadings, most allowances (site, danger, on-call while rostered), paid annual, sick and long service leave taken, and performance bonuses connected to ordinary hours.
Excluded from OTE: overtime worked outside ordinary hours (where genuinely identifiable as overtime), expense reimbursements and expense allowances such as tool or travel allowances expected to be fully spent, unused leave paid out on termination, and government paid parental leave. The trap is that the labels on a payslip do not decide the outcome. An all-inclusive hourly rate that buries overtime in a flat rate is generally all OTE, and a bonus paid for work partly done in overtime hours can still be OTE unless it relates solely to overtime. The ATO's list of payments that are OTE is the practical checklist.
Every OTE misclassification compounds. Treat a $100-a-week shift loading as non-OTE and you underpay super by $12 a week per affected employee; across a few staff and a few years that becomes a five-figure Super Guarantee Charge exposure, with interest and administration components on top, and the shortfall calculation uses a broader base than OTE. Because Single Touch Payroll Phase 2 reports payments to the ATO disaggregated by type (overtime, allowances, bonuses are each visible), the ATO can now detect implausible OTE patterns without an audit.
The common small-business errors: paying super on base rate only and skipping loadings and commissions; treating all allowances as expense allowances when most fixed allowances are OTE; assuming casual loading is not OTE (it is); and not paying super on paid leave. The clean approach is to map every pay item in your payroll software to an OTE classification once, when the item is created, rather than deciding at year end. Check what a pay run should cost, super included, with the OneBookPlus superannuation guarantee calculator.
Payday super replaced OTE with Qualifying Earnings (QE) as the SG base from 1 July 2026. QE keeps OTE as its core and adds two things: all commissions, including commissions for work done solely outside ordinary hours, and salary-sacrificed super amounts that would otherwise have been qualifying earnings. Overtime, expense allowances and paid parental leave stay outside the base.
| Payment | OTE (to 30 Jun 2026) | QE (from 1 Jul 2026) |
|---|---|---|
| Base wages, ordinary hours | Yes | Yes |
| Casual and shift loadings | Yes | Yes |
| Commissions (ordinary hours) | Yes | Yes |
| Commissions (overtime-only work) | Generally no | Yes |
| Salary-sacrificed super | Added back to the SG base | Included in QE |
| Overtime (genuinely separate) | No | No |
| Expense and tool allowances | No | No |
| Unused leave on termination | No | No |
The maximum earnings the 12% applies to also changed shape: a $62,500 per-quarter cap in FY2025-26 became an annual cap of $270,830 for FY2026-27.
The definitions above only get you so far; the free OneBookPlus superannuation guarantee calculator turns them into your own figures in seconds, no sign-up needed.
Only when it cannot be genuinely separated from ordinary hours. If an employee's contract or award clearly distinguishes overtime hours and rates, overtime pay is not OTE. But flat all-inclusive rates with no identifiable overtime component, or agreements where the so-called ordinary hours are actually all hours worked, make the whole amount OTE and super is payable on it.
Yes. Paid leave taken during employment (annual, personal, long service) is OTE and attracts the full 12% super. The exception is unused leave paid out as a lump sum on termination, which is not OTE, so no SG is payable on termination leave payouts.
Most are. Fixed allowances paid for the conditions or skills of the job (site, first-aid, danger, leading hand) are OTE. The exceptions are expense allowances expected to be fully spent doing the job, such as a genuine tool or travel allowance, and reimbursements of actual costs. When an allowance is really disguised salary, it is OTE regardless of its name.
Last reviewed and updated: by Bishal Shrestha