Qualifying Earnings (QE)

Qualifying Earnings (QE) is the statutory base used to calculate employer Super Guarantee (SG) contributions from July 1, 2026. QE replaces the legacy Ordinary Time Earnings (OTE) basis to standardize super calculations across industries. OTE was subject to various payroll loopholes and employer exclusions regarding overtime, allowances, and bonuses. Qualifying Earnings standardizes what counts as wages for super calculations, ensuring that all ordinary hours worked are treated consistently across different payroll platforms and avoiding administrative arbitrage. This new standard ensures that workers receive their full superannuation entitlements on all base wages earned during the pay cycle, preventing employers from using artificial salary packaging schemes to lower their super guarantee liabilities.

Real-World Example Under the old OTE system, Sarah's employer paid her $75,000 base salary plus $8,000 in annual bonuses and $3,000 in allowances ($86,000 total). The employer only calculated super on the $75,000 OTE, contributing $9,000 annually (12%). Under the new QE rules starting July 2026, super is calculated on the full $86,000 in Qualifying Earnings, increasing her employer's super contribution to $10,320 annually—an additional $1,320 per year flowing into Sarah's retirement account.