Choosing the correct earnings¶

Once you know you have to pay super, the next question is: super on which earnings? Super is not worked out on every dollar you pay a worker. It is worked out on a specific base called ordinary time earnings — broadly, what a worker earns for their ordinary hours of work.

Getting the base right matters, because using the wrong earnings figure changes how much super you owe. This lesson gives you the principle and the common traps. The module on Calculating super covers exactly what is included and excluded.

Why this matters¶

If you work out super on the wrong earnings, you can pay too little without realising it — and underpaid super can lead to extra charges from the ATO. Knowing the earnings base, and the few things that usually sit outside it, keeps your pay runs accurate.

What you will learn¶

• That super is worked out on ordinary time earnings
• What ordinary time earnings broadly means
• Common traps, such as overtime generally not being ordinary time earnings

Understanding the concept¶

Super is worked out on ordinary time earnings (OTE). The ATO describes OTE as, broadly, what a worker earns for their ordinary hours of work — their normal hours, rather than every payment you might make to them.

The ATO explains that OTE generally includes things like the pay for ordinary hours, plus certain items such as commissions and some loadings and allowances. It generally does not include overtime — provided the worker's ordinary hours are clearly set out in an award or agreement.

That last point is the most common trap. Overtime is usually outside OTE, so you usually do not pay super on it — but only if the ordinary hours are clearly identified. If they are not, the ATO says the hours actually worked can be treated as ordinary hours, which changes the picture. An award or agreement can also require you to pay super on payments that are not OTE.

From 1 July 2026, under Payday Super, the ATO works super out on qualifying earnings, which is built on ordinary time earnings — so OTE remains the core of what super is calculated on. The Calculating super module covers exactly which payments count.

Because the detail can be fiddly, the module on Calculating super sets out exactly which payments are included and which are excluded. This lesson is about the principle: use ordinary time earnings, and treat overtime with care.

Example¶

Jordan works at Priya's Cafe. In one week Jordan works ordinary hours plus two hours of overtime, paid at a higher overtime rate. Priya works out super on Jordan's ordinary time earnings — the pay for the ordinary hours. Because Jordan's ordinary hours are set out in the agreement, the overtime pay is generally not part of the earnings super is worked out on.

Common mistakes¶

• Working out super on total pay instead of ordinary time earnings.
• Including overtime in the super base when it generally sits outside it.
• Assuming overtime is always excluded — it depends on ordinary hours being clear.
• Ignoring an award or agreement that requires super on some non-OTE amounts.

How this works in myaccountant¶

Key points¶

• Super is worked out on ordinary time earnings, not on every payment.
• Ordinary time earnings is broadly what a worker earns for their ordinary hours.
• Overtime is generally not ordinary time earnings.
• This holds where ordinary hours are clearly set out in an award or agreement.
• The Calculating super module covers exactly what is included and excluded.

Learn next¶

• What is the Super Guarantee?
• Who is entitled to super?
• The Super Guarantee charge

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