Calculated Growth: Why Your "Ordinary Time Earnings" Are Changing

06/05/2026 02:42 PM

Calculated Growth: Why Your "Ordinary Time Earnings" Are Changing

As we move through May 2026, the ATO is preparing for a technical but critical shift in how superannuation is calculated. 1 July 2026, the focus moves away from "Ordinary Time Earnings" (OTE) toward a new standard: Qualifying Earnings (QE).

What are Qualifying Earnings?

For years, employers calculated the 12% super guarantee based on OTE. Payday Super regime, the base for calculation is being refined to Qualifying Earnings. This change is designed to simplify calculations for diverse pay structures—including bonuses, commissions, and certain allowances—ensuring they are captured more consistently across all payroll software.

The "7-Day" Compliance Window

It’s not just about how much you pay, but how fast it arrives. Along with the shift to QE, the ATO is strictly enforcing the arrival window. 7 business days of their payday.

What Happens if You Miss the Window?

The penalties in 2026 are becoming more automated. If a payment is late:

The SGC Charge: Unlike the old system, the new Superannuation Guarantee Charge (SGC) will compound daily at the General Interest Charge rate.
Administrative Uplift: Businesses with a history of late payments may face an additional "administrative uplift" penalty of up to 50% of the unpaid amount.

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