What are Qualifying Earnings (QE)?
The Australian Taxation Office (ATO) introduced qualifying earnings (QE) to define which payments employers use to calculate Super Guarantee (SG) contributions under Payday Super.
Qualifying earnings include:
- Ordinary time earnings (OTE)
- All commissions paid to an employee
- Salary sacrifice amounts that would have qualified as QE if they had not been sacrificed to superannuation
- Earnings paid to workers under the expanded definition of employee, including independent contractors paid mainly for their labour
What do Qualifying Earnings mean for employers?
From 1 July 2026, all employers must use qualifying earnings as the base for calculating both:
- Super Guarantee (SG), and
- Super Guarantee Charge (SGC)
Previously, employers calculated SG and SGC using different earnings bases. Under Payday Super, this change does not increase the amount of super many employers pay, but it does standardise how employers calculate and report super.
Who qualifies for Super Guarantee (SG)
Most employees are eligible for Super Guarantee. If you’re unsure, you can use the ATO’s Superannuation guarantee eligibility decision tool to determine whether an employee—including certain contractors—is entitled to super.
Employers may need to treat independent contractors paid mainly for their labour as employees for superannuation purposes.
Reporting Qualifying Earnings in Single Touch Payroll (STP)
From 1 July 2026, employers must report through Single Touch Payroll (STP):
- Each employee’s year‑to‑date qualifying earnings (QE), and
- Each employee’s year‑to‑date super liability
Reporting payments made to independent contractors paid mainly for their labour is optional. However, if employers choose to report these workers, they must report both QE and super liability.
Key STP reporting milestones:
- From 1 July 2026: QE and super liability reporting becomes mandatory
- From 1 July 2027: STP reports missing QE or super liability will be rejected by the ATO [ato.gov.au]
Why both Qualifying Earnings and super liability are reported
Qualifying earnings replaces ordinary time earnings as the base for calculating Super Guarantee under Payday Super.
Employers may also have additional super obligations under awards or enterprise agreements. These payments may fall outside qualifying earnings (QE), but employers can still report them as super liability through Single Touch Payroll (STP).
How employers can prepare for Qualifying Earnings reporting
To get ready for Payday Super and QE reporting:
- Check with your payroll or digital service provider to confirm when their software will support QE reporting
- Review your STP processes to ensure:
- Pay codes are accurate
- Employee details are up to date
- STP lodgements are made on time
- Visit ato.gov.au/paydaysuper for official guidance and updates from the ATO
