Ordinary time earnings (OTE)¶

When you work out how much super to pay an employee, you do not use their whole pay. You use a particular part of it called ordinary time earnings, or OTE.

The ATO describes OTE as, broadly, what an employee earns for their ordinary hours of work. This is the base employer super is worked out on, so knowing what counts as OTE is the first step in getting super right.

In one line

Ordinary time earnings (OTE) is broadly what an employee earns for their ordinary hours of work — and it is the base employer super is calculated on.

Why this matters¶

Super is a percentage of OTE, not a percentage of every dollar you pay. If you work super out on the wrong amount, you either underpay super (which can lead to a shortfall you have to fix) or overpay it. Understanding OTE is what keeps the calculation right.

What you will learn¶

What ordinary time earnings (OTE) is
Why OTE is the base employer super is worked out on
How OTE fits into qualifying earnings under Payday Super

Understanding the concept¶

Ordinary hours of work are the hours an employee is normally expected to work. These are usually set out in an award, an employment agreement, or a workplace agreement.

Ordinary time earnings (OTE) is, broadly, what the employee earns for those ordinary hours. The ATO explains that OTE is the amount you pay an employee for their ordinary hours of work. It can include more than just the base hourly rate — for example commissions and shift loadings can form part of OTE.

Employer super is worked out as a percentage of OTE. The super guarantee rate is 12% from 1 July 2025. So the OTE figure is the number the percentage is applied to.

Not everything you pay is OTE. Overtime, for example, is generally not OTE. The next two lessons cover what is in and what is out in detail.

For accountants & bookkeepers

OTE is defined in the super guarantee rules. An amount can only be OTE if it is first part of the employee's 'salary or wages'. Some salary or wages amounts are not OTE (such as overtime where ordinary hours are clearly identified), and some payments are not salary or wages at all. The ATO's list of payments that are ordinary time earnings is the working reference for classifying each pay item.

From 1 July 2026 — qualifying earnings. From 1 July 2026, under Payday Super, employers must pay super for each payday rather than quarterly, and the ATO works super out on qualifying earnings.

Qualifying earnings is built on OTE, so OTE remains the core. The ATO explains that qualifying earnings brings together ordinary time earnings and other payments already counted for super — such as all commissions and salary-sacrificed amounts. There are no changes to what payments are treated as OTE. The one thing added is commissions for work done entirely outside ordinary hours. Super is worked out as 12% of qualifying earnings.

Example¶

Priya runs a small cafe. Her employee Dan works his ordinary rostered hours each week and also earns a small weekly commission on catering orders. The pay Dan earns for his ordinary hours, plus that commission, is his ordinary time earnings. Priya works Dan's super out as a percentage of that OTE figure, not on any overtime he happens to pick up.

Common mistakes¶

Working super out on total gross pay instead of on OTE.
Assuming OTE is only the base hourly rate — it can include items like commissions and shift loadings.
Thinking OTE changed under Payday Super — the OTE definition stays the same; it now sits inside qualifying earnings.

How this works in myaccountant¶

In the app — myaccountant classifies each pay item as super-attracting or not, so the right earnings are picked up as OTE. It then works super out on the correct earnings each pay and applies the current rate for you.

Key points¶

OTE is broadly what an employee earns for their ordinary hours of work.
Employer super is worked out as a percentage of OTE.
The super guarantee rate is 12% from 1 July 2025.
OTE can include items like commissions and shift loadings, not just base pay.
From 1 July 2026, super is worked out on qualifying earnings, which is built on OTE.
OTE itself does not change under Payday Super.

Learn next¶

General information only — not tax, super or financial advice.

Did this answer your question?