From 1 July 2026, Payday Super legislation requires employers to report Qualifying Earnings (QE) for every employee. WageEasy handles this automatically as part of your Single Touch Payroll (STP2) submission.
Qualifying Earnings are the earnings that attract Superannuation Guarantee (SG). They replace the previous concept of Ordinary Time Earnings (OTE) as the basis for super guarantee calculations. They are reported to the ATO alongside your super liability in every STP2 lodgement.
WageEasy will automatically calculate the QE based on your preconfigured superannuation setup within each award and allowance. It is strongly recommended that you review these items before your first pay run on or after 1 July 2026 to ensure everything is correctly configured for your organisation.
You will see the new QE heading in STP2, by highlighting the Pay Event and selecting View Details, if you are not seeing it, you may need to right mouse click and Customise, scroll to find QE and drag it up to the heading, then close the customization box.
You will now see the codes below when printing out the STP Phase 2 Pay Event Report, under Employee YTD Totals.
Code L — super guarantee liability amount.
Code Q — the qualifying earnings amount the liability is based on.
The following guidance reflects ATO rules and can be used when reviewing your pay item configuration.
For a full reference, see the ATO's What payments are qualifying earnings page.
Included in Qualifying Earnings
Ordinary time earnings (OTE) - no change from previous rules
Ordinary hours wages and salaries (including daily rates and flexi-time arrangements)
Casual loading
Shift penalties, including public holiday penalties
Piece rates for ordinary hours
Workers' compensation where the employee performs work or is required to attend work
Time for travel or training paid within the span of ordinary hours
Paid leave
Annual leave
Annual leave loading - except where clearly linked to a lost opportunity to work overtime (see note below)
Sick, personal and carers leave
Long service leave that is not paid under a portable long service leave scheme
Rostered days off (taken at ordinary rates)
Time off in lieu (TOIL) - taken and paid at ordinary rates
Family and domestic violence leave, study leave, special paid leave, gardening leave
Cashed out annual leave, long service leave, sick/personal leave, and RDOs - in service
Bonuses and commissions
All commissions - regardless of whether they were earned during ordinary hours or overtime (this is a key change from OTE, where only ordinary-hours commissions qualified)
Performance bonuses, Christmas bonuses, sign-on bonuses, referral bonuses, return to work bonuses
Bonuses in respect of ordinary hours work (including those labelled ex gratia)
Allowances
Task, skill, higher duties, leading hand, first aid, supervisor, and retention allowances (reported as allowance type KN)
Allowances for adverse working conditions (e.g. working at heights, in heat or cold, in confined spaces)
Allowances that partially compensate for expenses where the allowance is paid regardless of whether the expense was incurred, or where the amount has no relationship to the actual cost
Other
Payment in lieu of notice (termination)
Salary sacrifice to superannuation - where the underlying payment would be QE if paid directly to the employee
Directors' fees (working and non-working directors)
Return to work payments
Excluded from Qualifying Earnings
Overtime
Overtime payments, where ordinary hours are clearly identified in an award or agreement
Annual leave loading clearly linked to a lost opportunity to work overtime
On-call allowances for hours outside ordinary hours
Call back allowances
Cash out of TOIL in service
Bonuses solely for work performed entirely outside ordinary hours
Paid leave
Employer-paid parental leave (maternity, paternity, adoption leave)
Government paid parental leave
Community service leave, jury duty leave, and defence reserve leave
Workers' compensation where the employee is not required to work (including top-up payments)
Long service leave paid under a portable long service leave scheme
Allowances
Expense allowances paid with the reasonable expectation that the money will be fully expended by the employee, for example, a tool allowance where the employee is expected to use the full amount to supply and maintain their tools
Termination payments
Unused leave on termination (annual leave, long service leave, personal leave, RDOs, TOIL)
Redundancy, severance, golden handshakes, genuine redundancy payments above the tax-free limit, and other payments in consequence of termination
Salary sacrifice
Salary sacrifice to non-superannuation benefits
Salary sacrifice to superannuation where the underlying payment would not be QE (e.g. parental leave, overtime)
Note: Annual leave loading: Standard award-based leave loading (e.g. 17.5%) is QE. If your organisation has a specific arrangement where leave loading compensates employees for lost overtime, the relevant pay item's Include in Qualifying Earnings checkbox should be unchecked. Contact your payroll consultant if you are unsure how your leave loading is classified.
Note: Allowances: The QE treatment of an allowance depends on its purpose, not just its name. An allowance that is expected to be fully expended by the employee (such as a tool allowance or meal allowance fully used in the course of work) is generally not QE. If you are unsure about a specific allowance, refer to the ATO guidance or contact your payroll consultant.
Employees under 18
Under-18 and 30 hours or fewer in the pay week
WageEasy applies the same Superannuation Guarantee exemption rule to Qualifying Earnings that it applies to the SG liability. If an employee is under 18 years old at the payment date and worked 30 hours or fewer across the calendar week (Monday-Sunday) in which the payment falls, their Qualifying Earnings for that period will be set to $0.00 and no super liability will be generated for that period.
If the employee worked more than 30 hours in the pay week, the exemption does not apply - Qualifying Earnings is calculated normally and super is owed.
Do I need to review my pay items?
Yes. While pay items have been automatically migrated in line with ATO guidance, all Awards and Allowances should be reviewed to confirm that the correct boxes have been ticked to calculate superannuation for your organisation's specific arrangements. You are responsible for ensuring your pay item configuration reflects the correct QE treatment for each payment type under the ATO's rules.