Every dollar of super your employer pays is calculated on a figure called ordinary time earnings, or OTE. If you have ever wondered why your super contributions look smaller than 12% of your total pay, or why a big overtime month barely moved your super balance, OTE is the answer. It is the legal base for the superannuation guarantee, and it deliberately excludes some of the money you earn.
This guide explains what ordinary time earnings are, exactly which payments count and which do not, how the 12% super guarantee is worked out, and what changed on 1 July 2026 when payday super replaced the old quarterly system. All figures are for the 2026-27 financial year unless stated otherwise.
What Are Ordinary Time Earnings?
Ordinary time earnings are the payments your employer makes to you for your ordinary hours of work. The term is defined in the Superannuation Guarantee (Administration) Act 1992 and explained in detail in ATO guidance. The key idea is simple: OTE is a subset of your total pay. It covers what you earn for your regular, rostered hours — not every dollar that lands in your bank account.
Your employer must pay superannuation guarantee (SG) contributions of 12% of your OTE. The 12% rate took effect on 1 July 2025 and remains the rate for 2026-27. There is no minimum earnings threshold for SG: since 1 July 2022, employers must pay super even for very small amounts of ordinary earnings, including for casual and part-time workers.
That distinction between OTE and total pay matters. Two employees can take home the same gross pay in a year and receive very different super contributions, purely because of how their pay is made up.
What Counts as Ordinary Time Earnings?
The ATO publishes a list of payments that are OTE. The following are the most common inclusions for ordinary employees:
- Base salary or wages for ordinary hours — your standard pay for your contracted hours. This is the foundation of OTE.
- Casual loading — the 25% loading paid to casual employees is part of OTE. Super is calculated on the full casual rate, loading included.
- Shift loadings and penalty rates for ordinary hours — if your ordinary rostered hours fall on a weekend, at night or on a public holiday, the loadings and penalty rates on those ordinary hours count as OTE.
- Annual leave loading — the common 17.5% loading paid while you are on annual leave is OTE, because it relates to your ordinary hours.
- Paid leave taken during ordinary hours — annual leave, personal leave and long service leave paid at your ordinary rate count as OTE.
- Allowances paid for ordinary hours — allowances such as a first-aid allowance, height allowance or shift allowance that relate to ordinary hours of work are generally OTE.
- Bonuses and commissions for ordinary hours — a performance bonus or commission earned in respect of ordinary hours of work is OTE.
- Salary sacrificed amounts (from 1 July 2026) — under payday super, amounts you salary sacrifice into super now form part of the new “qualifying earnings” base. For 2025-26 and earlier, sacrificed amounts sat outside OTE.
The test the ATO applies is whether the payment is made “in respect of” your ordinary hours of work. If it is, it is almost always OTE.
What Is NOT Ordinary Time Earnings?
Just as important is what falls outside OTE. These payments do not attract the 12% super guarantee:
- Overtime payments — the biggest exclusion. Any payment for hours worked beyond your ordinary hours is not OTE, no matter how regularly you work it. This includes overtime penalty rates.
- Payments for hours above the ordinary-hours cap in your award or agreement — if your ordinary hours are 38 per week, hours 39 and beyond are overtime for SG purposes.
- Reimbursements of expenses — money that reimburses you for costs you incurred (for example, travel or tools) is not OTE.
- Termination payments — unused annual leave or long service leave paid out when you leave a job is not OTE, and no super is payable on it. Genuine redundancy payments are also excluded.
- Workers compensation payments — generally not OTE, although some return-to-work payments can be.
- Parental leave pay from the government — the government-funded Parental Leave Pay scheme does not attract SG, although employer-paid parental leave generally does.
The overtime exclusion is the one that catches most people by surprise. If you regularly work 10 hours of overtime a week, a meaningful share of your pay never attracts super — which is one more reason to check your payslip and understand your OTE figure.
How the 12% Super Guarantee Is Calculated
The calculation itself is straightforward:
SG contribution = OTE × 12%
Here is a worked example. Imagine Sarah earns a base salary of $90,000 a year for her ordinary 38 hours a week. Over the year she also earns $12,000 in overtime and a $3,000 performance bonus tied to her ordinary duties.
| Payment | Amount | OTE? | SG (12%) |
|---|---|---|---|
| Base salary (ordinary hours) | $90,000 | Yes | $10,800 |
| Performance bonus (ordinary hours) | $3,000 | Yes | $360 |
| Overtime | $12,000 | No | $0 |
| Total | $105,000 | $93,000 | $11,160 |
Sarah’s total gross pay is $105,000, but her employer only has to pay super on $93,000 of it — $11,160 for the year, not the $12,600 that 12% of her total pay would suggest. The $1,440 difference is entirely due to the overtime exclusion. Her employer can choose to pay super on overtime as well, and some awards and enterprise agreements require it, but the law does not.
To check your own position, multiply your ordinary-hours pay by 12% and compare it with the super shown on your payslip. Our super calculator can do the maths for you — enter your salary and it shows the SG your employer should be paying.
The Maximum Contribution Base: A Cap on OTE
There is also a ceiling on the earnings an employer must use when calculating SG, called the maximum contribution base (MCB). Once your OTE reaches the cap, your employer is not required to pay SG on any further ordinary earnings.
For the 2025-26 financial year, the maximum contribution base was $62,500 per quarter. That meant the maximum SG an employer had to pay was $7,500 per quarter, or $30,000 a year. An employee earning $300,000 a year in ordinary earnings — $75,000 a quarter — would have SG calculated only on the first $62,500 each quarter:
| Quarterly OTE | SG at 12% on full OTE | SG actually required |
|---|---|---|
| $75,000 | $9,000 | $7,500 (capped) |
| $50,000 | $6,000 | $6,000 |
| $62,500 | $7,500 | $7,500 |
From 1 July 2026, under payday super, the quarterly cap was replaced with an annual maximum contribution base of $270,830 for 2026-27. Once your qualifying earnings reach $270,830 in the financial year, your employer can stop paying the minimum SG for the rest of the year. The cap does not limit what your employer may voluntarily pay, and it does not affect any extra super required by your award or enterprise agreement.
Payday Super: What Changed on 1 July 2026
From 1 July 2026, the super guarantee moved to the payday super system. Three things changed that matter for employees:
- Super is paid on payday, not quarterly. Your employer must now ensure SG reaches your fund within seven business days of each payday, instead of up to a month after the end of each quarter.
- The base is now “qualifying earnings”, not OTE. Qualifying earnings include everything that counted as OTE, plus salary sacrificed amounts. Overtime is still excluded.
- The maximum contribution base is annual. The $270,830 annual cap for 2026-27 replaces the old $62,500 quarterly cap.
For most employees the practical effect is simple: super arrives in your fund sooner, and you can spot a missed payment within days instead of months. If your super does not appear shortly after a payday, raise it with your employer promptly — and check your fund’s transaction history, not just your payslip, because a payslip shows what is liable to be paid, not necessarily what has been received.
Common OTE Mistakes to Watch For
SG errors are common, and they usually favour the employer. Watch for these:
- Super calculated on the wrong base. Some payroll systems apply 12% to total gross pay including overtime (overpaying you, which is fine) — but others apply it to a base that wrongly excludes loadings or leave loading (underpaying you).
- Overtime misclassified as ordinary hours. If your award says ordinary hours are 38 a week but your employer treats 45 hours as ordinary, your OTE — and your super — will be overstated or understated depending on the direction of the error. Your award or agreement defines your ordinary hours.
- No super on paid leave. Super is payable on annual leave and personal leave taken at your ordinary rate. If your employer stops SG while you are on leave, that is usually wrong.
- Missing super for casuals. There is no $450-a-month threshold any more. Since 1 July 2022, even a single casual shift attracts SG on the ordinary earnings for that shift.
- SG paid late or not at all. Under payday super, late payment triggers the super guarantee charge, which is calculated on total salary and wages (not just OTE) and is not tax-deductible for the employer — so employers have a strong incentive to pay on time.
How to Check Your OTE and Super
Follow these steps once a quarter — or once a month under payday super:
- Find your ordinary-hours pay on your payslip. Separate it from overtime, reimbursements and termination payments.
- Multiply that figure by 12%. That is the minimum SG for the period.
- Compare it with the super amount on your payslip, then confirm the money actually arrived in your super fund.
- If the numbers do not match, ask your employer’s payroll team for a breakdown of your OTE. If the issue is not resolved, you can report unpaid super to the ATO, which can investigate and recover it.
Remember that your payslip shows super contributions paid or liable to be paid for the period — it does not prove the money reached your fund. Log in to your super fund and check the transactions.
Frequently Asked Questions
Is overtime included in ordinary time earnings?
No. Overtime payments are specifically excluded from OTE under the superannuation guarantee law. Your employer does not have to pay the 12% SG on overtime, although your award or enterprise agreement may require it.
Does casual loading count as OTE?
Yes. The 25% casual loading is part of ordinary time earnings, and super is calculated on your full casual rate including the loading. The same applies to shift loadings and penalty rates paid for ordinary hours.
Is annual leave loading part of OTE?
Yes. The 17.5% annual leave loading is paid in respect of your ordinary hours while on leave, so it counts as OTE and attracts SG.
What is the maximum super contribution base for 2026-27?
For 2026-27 it is $270,830 per year under the payday super system. Once your qualifying earnings reach that amount in the financial year, your employer is not required to pay further minimum SG. For 2025-26 the cap was $62,500 per quarter.
Do I get super on my salary sacrifice amounts?
From 1 July 2026, yes — salary sacrificed amounts are part of qualifying earnings, so SG is calculated on your pre-sacrifice ordinary earnings. Before that date, sacrificed amounts sat outside OTE and reduced the SG base.
What happens if my employer pays super late?
Late SG triggers the super guarantee charge, which the employer must pay to the ATO. The charge is calculated on a broader base (total salary and wages, including overtime) plus interest and an administration fee, and it is not tax-deductible. You can report unpaid super to the ATO.
The Bottom Line
Ordinary time earnings are the foundation of your superannuation guarantee. They cover your pay for ordinary hours — base salary, casual loading, shift loadings, penalty rates on ordinary hours, leave loading and bonuses tied to ordinary work — but not overtime, reimbursements or termination payouts. At 12%, the difference between OTE and total pay can be thousands of dollars a year, so it is worth knowing which figure your employer is using.
Check your next payslip: separate your ordinary-hours pay from overtime, multiply by 12%, and confirm the result matches both your payslip and your super fund balance. If it does not, ask questions — it is your retirement money. Use our super calculator to work out exactly what your employer should be contributing on your salary.
