Unpacking Qualifying Earnings for employers

When the Australian Government announced their Payday Super plans, which will require employers to align employee super payments to be paid at the same time as salary and wages, they also introduced a new term, ‘Qualifying Earnings’ (QE).

The intent of QE is to clearly define employee earnings that qualify for super, while setting apart payments that don’t.

QE is designed to stop the guesswork, removing uncertainty by giving businesses a single clear list of payment types to use when calculating super. 

What are Qualifying Earnings?

Qualifying Earnings are the types of salary and wage payments an employee receives that must have the Superannuation Guarantee applied.

From 1 July 2026, employers will need to calculate super on Qualifying Earnings. Let’s look at what made the QE list.

What counts as Qualifying Earnings?

• Base salary and wages, ordinary hours of work
• Salary Sacrifice, which would have been considered ordinary hours prior to sacrifice arrangements
• Commissions and bonuses, performance-based payments
• Allowances, for skills, qualifications, or specific duties (e.g., first aid)
• Paid leave, annual leave, personal leave, long service leave 

Employers will also need to consider payments to workers who are treated as employees for super, including some contractors who are paid mainly for their labour.  

What’s not considered Qualifying Earnings?

• Overtime payments, hours worked outside ordinary time
• Some leave entitlements, such as community service leave, jury duty, defence reserve leave
• Expense reimbursements, work-related costs covered by the employer
• Termination payments, lump sums on ending employment

Check out the ATO's full list of QE.

(*Ordinary hours calculated as $28 × 38 hours × 2 weeks = $2,128)

The ATO have put together a few more examples of Qualifying Earnings and how they’re calculated to better help employers.