In this topic
- Introduction
- Qualifying Earnings (QE) Explained
- What Is Qualifying Earnings?
- Why Is This Changing?
- What Counts as Qualifying Earnings?
- How Salary Sacrifice Affects QE
- How Aussiepay Handles QE
- QE vs Super Liability (L)
- Where to Configure QE in Aussiepay
- Key Things to Remember
Introduction
This topic explains what Qualifying Earnings (QE) is, why it matters from 1 July 2026, and how Aussiepay calculates and reports it.
Disclaimer: This documentation outlines how Aussiepay supports Qualifying Earnings (QE) configuration for Pay Day Super. It is provided for general information purposes only and does not constitute legal, tax, or financial advice. You should seek advice specific to your organisation’s obligations from the Australian Taxation Office (ATO) or your accountant. While your payroll consultant can assist with system configuration and operational guidance within Aussiepay, they are not authorised to provide advice on your legal or compliance obligations under Australian superannuation law.
Qualifying Earnings (QE) Explained
Qualifying Earnings is the term used to describe the earnings on which superannuation guarantee contributions are calculated from 1 July 2026. It replaces the previous concept of “Ordinary Time Earnings” (OTE).
This topic explains what QE is, why it matters, and how it is applied within Aussiepay to support accurate superannuation reporting and compliance under Pay Day Super.
What Is Qualifying Earnings?
Qualifying Earnings is the portion of an employee’s earnings that counts toward the Superannuation Guarantee (SG) calculations. From 1 July 2026, the ATO requires employers to:
- Identify which earnings are “qualifying” for SG purposes
- Report those earnings in every STP submission
- Calculate and report the Super Liability (L) based on Ordinary Time Earnings (OTE)
Aussiepay supports this by automatically calculating QE based on your paycode mappings configured in the STP2 Config screen, ensuring your superannuation reporting aligns with Pay Day Super requirements.
Why Is This Changing?
Under Pay Day Super reforms, the ATO requires more detailed data in STP submissions to verify that employers are paying the correct amount of super on time. Qualifying Earnings (QE) is the mechanism used to capture this information, making superannuation calculations transparent, traceable, and auditable at the payroll level.
What Counts as Qualifying Earnings?
The ATO determines which types of earnings are qualifying. As a general guide:
| Earnings Type | Typically Qualifying? | Notes |
|---|---|---|
| Regular salary and wages | Yes | Included as standard earnings for SG purposes |
| Paid leave (annual, personal, long service) | Yes | Treated as ordinary earnings |
| Overtime | No (generally) | Typically excluded from QE |
| Allowances (role/function-based) | Depends | Review based on ATO guidance |
| Bonuses and commissions | Depends | Treatment varies depending on the nature of the payment |
| Salary packaging deductions | Depends | Review based on ATO guidance |
NOTE: The treatment of some pay components can vary depending on how they are classified under superannuation rules. Where indicated, review the relevant ATO guidance or seek advice to ensure correct QE mapping.
NOTE: Under-18 employees: Employees under 18 are only subject to super, and QE, when they work more than 30 hours per week. Aussiepay handles this automatically for weekly payrolls.
How Salary Sacrifice Affects QE
Salary sacrifice arrangements can affect your QE calculation depending on the type:
| Salary Sacrifice Type | Impact on QE | Notes |
|---|---|---|
| Type S (salary sacrifice to super) | No impact | Does not change Qualifying Earnings |
| Post-tax deductions | No impact | Applied after tax, with no effect on QE |
| Type O (salary sacrifice for other benefits, for example novated lease or pre-tax benefits) | Reduces QE | Lowers the earnings used for SG calculation |
Example: If gross earnings are $5,000 and you have a $1,000 Type O salary sacrifice deduction, for example a novated lease, the QE reported will be $4,000.
QE = Gross QE pay codes - Type O deduction amounts
How Aussiepay Handles QE
Here is how QE works end-to-end in Aussiepay:
- Paycode Mapping - Each paycode is mapped to either QE = Yes or QE = No in the STP2 Config screen. Aussiepay pre-fills these mappings based on your current OTE setup.
- Review and Confirmation - Before 31 May 2026, you must review the pre-filled mappings and confirm they are correct for your organisation’s payroll.
- QE Calculated Each Pay Run - During each payroll, Aussiepay automatically calculates Qualifying Earnings for each employee based on paycodes flagged as qualifying, adjusted for any applicable deductions such as Type O salary sacrifice.
- Super Liability (L) Calculated - Aussiepay then calculates the Super Liability (L) using Ordinary Time Earnings (OTE) multiplied by the applicable SG rate, subject to the Maximum Contributions Base.
- Reported in STP - From 1 July 2026, the QE and Super Liability (L) values are included in every STP2 submission sent to the ATO for each pay event.
QE vs Super Liability (L)
| Term | What it means | How it’s calculated |
|---|---|---|
| Qualifying Earnings (QE) | The total earnings in a pay period that count toward superannuation guarantee (SG) reporting | Calculated based on your confirmed QE paycode mappings, adjusted for any applicable deductions such as Type O salary sacrifice |
| Super Liability (L) | The superannuation amount owed for the pay period | Calculated as Ordinary Time Earnings (OTE) multiplied by the SG rate, subject to the Maximum Contributions Base (MCB) |
NOTE: Qualifying Earnings (QE) and Super Liability (L) may differ, as Super Liability is calculated using Ordinary Time Earnings (OTE), not QE. Both QE and Super Liability (L) values are reported to the ATO in every STP submission from 1 July 2026.
Where to Configure QE in Aussiepay
QE mappings are managed in the STP2 Config screen.
Navigation: Employer -> STP2 Config (left menu)
For a full walkthrough of how to review, update, and confirm your mappings, see the Qualifying Earnings configuration topic for this product set.
Key Things to Remember
- You as an employer are responsible for confirming the QE paycode mappings
- QE replaces OTE as the basis for super reporting from 1 July 2026
- Super Liability (L) continues to be calculated using OTE multiplied by the SG rate
- Type O salary sacrifice deductions reduce QE, while Type S has no impact
- Aussiepay pre-populates your QE mappings, but you must review and confirm them before 31 May 2026
- QE and Super Liability (L) are automatically included in every STP submission from 1 July 2026
- You can update your mappings at any time after confirming, though we recommend consulting your payroll consultant before making changes
