What counts as qualifying earnings for SG?

For practices advising employer clients, the key point is that the ATO has defined a broader calculation base than a narrow ordinary-hours view. On its Payday Super guidance, the ATO states that the minimum super guarantee is 12% of qualifying earnings for the pay period from 1 July 2026.

The same ATO material says the rate itself has not changed. It explains that from 1 July 2026 employers use qualifying earnings to calculate super guarantee contributions, and that “The super guarantee rate (12%) hasn't changed.”

The ATO’s overview page adds an operational change that matters for payroll reviews. From 1 July 2026, all employers will use qualifying earnings as the base to calculate both the SG amount and the super guarantee charge, whereas the page says employers currently calculate SG and SGC on different earnings bases.

What sits inside qualifying earnings is set out expressly by the ATO. The included amounts are ordinary time earnings, all commissions paid to an employee, salary sacrifice amounts that would qualify had they not been sacrificed to superannuation, and certain payments specifically included for people under the expanded definition of employee.

That ordinary time earnings component is not just base salary. The ATO says OTE includes payments for ordinary hours of work, including certain types of paid leave, allowances, bonuses and lump sum payments.

Commissions are one of the clearest practical traps. The ATO says commissions for work done entirely outside ordinary hours must now be included in qualifying earnings when calculating super guarantee contributions from 1 July 2026.

That matters because many payroll setups have historically started with OTE logic and stopped there. Under the ATO’s qualifying earnings approach, commissions are not limited to commissions attached to ordinary hours.

Salary sacrifice is another area where older payroll assumptions can produce errors. In ATO Guidance Note GN 2020/1, the ATO says that from 1 January 2020 employers calculate the minimum amount of super guarantee on the employee’s OTE base, being OTE plus any OTE amounts sacrificed for super contributions.

The same guidance note also says sacrificed contributions no longer count towards the employer’s super guarantee obligations. That is why the ATO’s qualifying earnings pages include salary sacrifice amounts that would have qualified had they not been sacrificed to superannuation.

The expanded employee definition also deserves a separate check in client reviews. The ATO’s qualifying earnings overview includes payments to independent contractors paid mainly for their labour where the payment is made in respect of that labour.

It also includes payments to a sportsperson, performer, musician, film maker, or an individual involved in similar or related activities, where the payment is in respect of the provision or performance of a specified activity or service. Those categories are specific enough that practices should not assume a contractor code automatically means no SG calculation is needed.

Annual leave loading remains relevant because qualifying earnings include OTE, and annual leave loading can fall inside OTE. The ATO says annual leave loading is included in ordinary time earnings unless it is clearly linked to lost overtime.

The evidence standard is also stated on that page. To omit annual leave loading from OTE, the ATO says employers need written evidence showing the loading is linked to a lost opportunity to work overtime, such as the relevant award or agreement or a documented policy understood by employer and employees.

The annual cap is another concrete figure practices will need in software checks. On its maximum contribution base page, the ATO states the maximum contribution base for 2026–27 is $270,830.

The same page explains what that number does. If qualifying earnings paid to an employee reach $270,830 in the 2026–27 financial year, the employer does not need to make super guarantee contributions for any additional qualifying earnings paid to that employee for the rest of the year.

The ATO also sets out the formula behind the cap. It says the maximum contribution base is calculated as concessional contributions cap × 100 ÷ charge percentage, and that from 1 July 2026 the concessional contributions cap is $32,500 while the charge percentage is 12%, producing $270,830 for 2026–27.

There is also a worked example on the ATO’s qualifying earnings page that can help with payroll testing. In that example, on 10 July 2026 Greta pays Amir a fortnightly wage of $3,000 for ordinary hours, and the ATO says 12% of $3,000 is $360 in super guarantee.

For practices, the safest response is a structured earnings-code review before clients rely on Payday Super settings. Check which pay items are treated as OTE, identify commissions paid outside ordinary hours, review salary sacrifice mappings against GN 2020/1, and confirm whether any annual leave loading exclusion is backed by written evidence.

Then test the annual cap logic for higher-income employees. The ATO’s published figures of $32,500, 12% and $270,830 give you three separate checkpoints for validating whether software is applying the maximum contribution base correctly in 2026–27.

The practical takeaway is that qualifying earnings are broader than ordinary time earnings alone, but they are not undefined. As the ATO says, “Qualifying earnings is a new term for the payments to employees that you include when calculating their super guarantee”.