Qualifying earnings under Payday Super: which bonuses, commissions and allowances count

A $1,000 commission on Sunday's sales now carries super guarantee. A $1,000 bonus paid solely for that Sunday's work, outside ordinary hours, does not. Under Payday Super, what the payment is really for decides it, not what the payslip calls it.

Here is the working. The ATO now counts all commissions as qualifying earnings, including commission solely for work performed entirely outside ordinary hours. The minimum super guarantee is 12% of qualifying earnings for the pay period (checked November 2026). So our estimate of the minimum super on that commission is $120: $1,000 at the 12% rate (checked November 2026).

The bonus goes the other way. The ATO says a bonus payment for work performed entirely outside ordinary hours is not included in qualifying earnings. Its list of payments that are ordinary time earnings gives exactly that case: a $1,000 team bonus paid entirely for Sunday work, which the ATO treats as overtime. Unless an award or agreement says otherwise, the minimum super on that bonus is nil.

Same Sunday, two pay lines

At ARC Business Development, our view is that this is where Payday Super catches a payroll out. Two payments for the same weekend can be sorted differently because of what they are paid for. A commission is paid on sales. A bonus stays out only when it is clearly and solely for work done entirely outside ordinary hours. Renaming a pay line does not move it from one side to the other.

If your commission plan pays on weekend, after-hours or event sales, that is the pay code to check first. Under the old rules, some of those commissions sat outside the minimum super guarantee. They no longer do.

What counts as qualifying earnings

Qualifying earnings is the new base for working out super guarantee for earnings paid from 1 July 2026. For most employers it does not change the amount paid. Everything that was in your super guarantee calculation up to 30 June 2026 continues to be included, and the ATO says there are "no changes to what payments are considered ordinary time earnings".

The ATO's own example is a $3,000 fortnightly wage for ordinary hours. It carries $360 super guarantee at the 12% minimum (checked November 2026).

The definition matters beyond the pay run. Under Payday Super, a late super shortfall is assessed by the ATO and calculated on qualifying earnings. Treat the lists below as examples, not a complete catalogue.

Are commissions included?

It is no longer true that commissions for work done outside ordinary hours escape super: since 1 July 2026, all commissions are qualifying earnings, including those for work performed entirely outside ordinary hours.

The ATO's comparison table shows the shift in one row. "Commission solely for work performed entirely outside ordinary hours" was not ordinary time earnings before 1 July 2026, and is qualifying earnings from 1 July 2026.

Are bonuses included?

Bonuses still follow the ordinary hours logic. A bonus for work performed entirely outside ordinary hours is not qualifying earnings. A bonus tied to ordinary hours work generally is. The ATO's draft ruling on qualifying earnings calls this a very limited exception: there needs to be clear evidence the bonus was paid solely for that work. A performance bonus that is even partly for results in ordinary hours counts in full.

Calling a bonus discretionary does not take it out of super: the ATO's pre-1 July 2026 list of ordinary time earnings included performance, Christmas, sign-on and referral bonuses, along with one "labelled as ex gratia but in respect of ordinary hours work".

The ATO's current qualifying earnings table lists the same bonuses as qualifying earnings from 1 July 2026.

Are allowances included?

Most allowances paid for the work itself are in. The ATO lists as qualifying earnings:

• task allowances for skills or work effort, such as higher duties, leading hand, first aid and supervisor;
• allowances for adverse conditions such as heights, confined spaces, cold, wet, heat and danger;
• retention allowances;
• an hourly on-call allowance for ordinary hours.

The test for expense allowances is whether you expect the money to be spent. An allowance paid with the reasonable expectation it will be fully spent by the employee in providing their services is not qualifying earnings. The ATO's example is a tool allowance under the Joinery and Building Trades Award.

An allowance that only partly compensates for expenses, or has no relationship to the actual cost, is qualifying earnings. Ask that question of every tool, vehicle or similar allowance on your books.

On-call is split by hours. An on-call allowance for hours outside ordinary hours, and a call-back allowance, are not qualifying earnings.

When does overtime count?

Overtime is not qualifying earnings only when ordinary hours are clearly identified in an award or agreement and the overtime is clearly identifiable. If no award or agreement sets them, ordinary hours are the employee's normal or regular hours, and where there is no regular pattern every hour worked counts. Overtime folded into an annualised or lump-sum salary follows the same test: unless it is clearly identifiable, it counts.

The ATO gives a call centre example. Where no award or agreement specifies ordinary hours and there is no regular pattern, the worker's extra shifts are all ordinary time earnings and qualifying earnings.

Two overtime-linked items also sit outside: cash-out of time off in lieu, and annual leave loading clearly linked to lost overtime.

Leave, loadings and other pay lines

Shift penalties, casual loading, public holiday penalties and annual leave are qualifying earnings. Employer-paid and government paid parental leave are not.

Salary sacrificed amounts count if they would have been qualifying earnings had they not been sacrificed. A payment that fits more than one category is counted once.

Contractors can be in scope too. Independent contractors paid mainly for their labour are employees for super guarantee, and their labour payments are qualifying earnings.

When your award asks for super on more

Qualifying earnings sets the legal minimum. Your award or agreement can set more. It can require super on amounts that are not qualifying earnings, such as paid parental leave or overtime.

You still pay that super. In STP you report it as super liability, not as qualifying earnings. Read the super clause in your award or agreement before you switch off super on any pay code.

Example: when the super on a Christmas bonus is due

Super is on time if the employee's fund receives it, with the information needed to allocate it, within 7 business days of paying the qualifying earnings. The ATO calls paying on payday best practice.

Bonuses, commissions and allowances paid outside the normal cycle get a little longer. Out-of-cycle payments are due within 7 business days after the employee's next regular, in-cycle pay. In the ATO's example, a $1,000 Christmas bonus paid on 7 December 2026 and regular pay on 10 December 2026 both have super due on 21 December 2026.

If that bonus is for ordinary hours work, as Christmas bonuses were on the ATO's pre-1 July list, our estimate of the minimum super on it is $120: $1,000 at 12% (checked November 2026).

Business days exclude weekends and any whole-state or territory public holiday, even one in another state. The first contribution for a new employee or a new fund gets 20 business days.

Late super is costly. It can bring the super guarantee charge. Even if you pay the shortfall late, interest, administrative amounts and choice loading can still apply.

For the cash side of December, see our post on planning your cash flow for every pay run and the Christmas period.

Check your payroll before the next pay run

• Commission pay codes: every commission, including one paid solely for work entirely outside ordinary hours, is mapped as qualifying earnings.
• Bonus pay codes: bonuses for ordinary hours work are counted. Only bonuses for work performed entirely outside ordinary hours are left out.
• Each allowance:
  • Expense allowances you reasonably expect to be fully spent are out.
  • Task, adverse conditions and retention allowances are in.
  • Allowances that only partly cover a cost, or bear no relation to it, are in.
• On-call and call-back: hourly on-call for ordinary hours is in. On-call outside ordinary hours, and call-back, are out.
• Overtime: it stays out only where ordinary hours are clearly identified in the award or agreement and the overtime is clearly identifiable. Otherwise it counts, including overtime folded into an annualised salary.
• Award or agreement: where it requires super on amounts that are not qualifying earnings, you still pay it and report it as super liability.
• Software: ask your provider when it will report qualifying earnings.
• Out-of-cycle payments: their super is due within 7 business days after the next regular pay.

Reporting is changing too. From 1 July 2026, employers report each eligible employee's year-to-date qualifying earnings and super liability through STP each payday. STP reports that lack both by 1 July 2027 will be rejected.

For a payment that sits on the line, put the question to a registered tax or BAS agent, or the ATO, before payday rather than after.

Your next step

Pull up last month's pay run and read down the pay codes with this list beside you. Commissions and allowances are the lines most worth a second look.

If you would like to talk through how these payments, and their super deadlines, sit in your cash flow over Christmas, book a 20-minute conversation with Andrew at ARC Business Development.

Sources

• https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-on-payday/what-payments-are-qualifying-earnings
• https://www.ato.gov.au/businesses-and-organisations/super-for-employers/payday-super-resources/explaining-qualifying-earnings
• https://www.ato.gov.au/businesses-and-organisations/super-for-employers/quarterly-super-to-30-june-2026/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings
• https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-on-payday/payment-deadlines-for-payday-super
• https://www.ato.gov.au/businesses-and-organisations/super-for-employers/about-payday-super