Qualifying earnings became one of the most important payroll terms for Australian employers when Payday Super commenced in 2026. The concept affects how the 12% super guarantee is calculated, so businesses that simply carry forward old payroll codes without review can create repeated errors across every pay run.
This TNS Accounting guide explains what Melbourne employers should review, how to test payroll settings, and why qualifying earnings should be treated as a payroll-configuration issue rather than a once-a-year compliance task.
What are qualifying earnings under Payday Super?
The ATO describes qualifying earnings as the earnings base used under Payday Super. It brings together relevant earnings categories for super calculations and should be applied using current ATO guidance. ATO Payday Super guidance explains the framework and the 12% super guarantee rate.
Why should employers review old payroll codes before using qualifying earnings?
Payroll systems often contain years of customised earnings codes for ordinary wages, overtime, bonuses, commissions, allowances, salary sacrifice and contractor-style payments. A code can look correct on a payslip while still having the wrong super treatment behind the scenes.
Review each active earnings code, identify its business purpose, confirm its current treatment and document why. If a code is no longer used, deactivate it rather than leaving it available for accidental selection.
How should commissions and salary sacrifice be reviewed for Payday Super?
Employers should confirm the current ATO treatment rather than making assumptions based on historic ordinary-time-earnings settings. Salary sacrifice and commission arrangements deserve particular attention because they can affect how earnings are presented and how super calculations are configured.
How should contractor payments be checked for super obligations?
Some workers described commercially as contractors can still fall within super rules depending on the arrangement. Payroll and accounts-payable teams should not decide the issue solely from the label on an invoice. Where a labour arrangement may create a super obligation, obtain current advice and document the classification.
How can a Melbourne employer test qualifying earnings in payroll software?
Create test scenarios using the payment types that actually occur in the business. Compare the expected super result with the payroll calculation, then review the posting to the super-payable account. Test common scenarios such as ordinary wages plus overtime, allowances, commission, salary sacrifice and termination-related payments.
Testing is especially useful before a new payroll year, software migration or major pay-code change. TNS Accounting can help businesses review the accounting and reconciliation side of this setup.
How should qualifying earnings be reconciled after payday?
Compare the payroll register’s super calculation with the amount sent through the super payment process and the balance in the accounting ledger. Investigate differences immediately. A growing super-payable balance is a warning sign that calculated contributions are not clearing correctly.
For the broader process, see the Payroll Management Guide and the Payday Super 7-day rule guide.
How should payroll teams map earnings codes to qualifying earnings?
Create a payroll-code register that lists every active earnings code, its purpose, STP classification, super treatment and general-ledger account. Review the register against current ATO guidance and remove or deactivate duplicate legacy codes. This is especially important where different managers have created similar allowance or bonus codes over time.
The register also makes future reviews easier. When a rule changes, the payroll team can identify all affected codes rather than searching employee-by-employee.
How should qualifying earnings be tested after a payroll software change?
Run parallel or sample calculations before relying on a migrated system. Use realistic cases that include ordinary wages, overtime, commission, allowances, salary sacrifice and other payments used by the business. Compare the old and new outputs, but do not assume the old output was correct simply because it was familiar.
After the first live pay run, reconcile calculated super, the contribution transaction and the general-ledger liability. Any difference should be explained before the next cycle.
What evidence should employers retain for qualifying-earnings decisions?
Keep the code-mapping review, supporting ATO guidance, payroll test results, approvals and notes for unusual payment types. Clear documentation helps future reviewers understand why a payroll code was configured in a particular way.
How should a business review qualifying earnings after introducing a new allowance?
Before the allowance is used in a live pay run, confirm its purpose, ATO treatment, STP classification, super setting and general-ledger mapping. Test the calculation on a sample employee and document who approved the new code. This prevents a convenient new payroll item from becoming a recurring configuration error.
What questions do employers ask about qualifying earnings in 2026?
What rate applies to qualifying earnings?
The super guarantee rate is 12%, subject to the current Payday Super rules.
Are qualifying earnings the same as gross pay?
Not necessarily. Payroll should apply the current ATO rules to each earnings type rather than assuming all gross pay is treated identically.
Are qualifying earnings the same as ordinary time earnings?
The Payday Super framework uses qualifying earnings as the relevant base, so employers should not rely solely on historic OTE assumptions.
Should every payroll code be reviewed?
Review all codes that are active or may be used, especially those affecting super.
Can an allowance affect super?
It can, depending on the nature of the payment and current rules. Check the specific treatment.
Can commissions affect qualifying earnings?
Yes, commission arrangements should be reviewed under the current framework.
Does salary sacrifice need separate testing?
Yes. Confirm the payroll setup and how the arrangement interacts with super calculations.
Can contractors have super obligations?
Yes, some arrangements can create super obligations even where the worker is called a contractor.
Should payroll and bookkeeping teams use the same codes?
They should use consistent mappings so payroll expense and liability accounts reconcile correctly.
How often should qualifying earnings settings be reviewed?
Review them when rules change, software changes, pay codes are added, or payment arrangements change.
What is the biggest configuration risk?
A wrong setting that repeats automatically across every employee and pay cycle.
Can TNS Accounting review the ledger side?
Yes. TNS Accounting can review payroll journals, super liabilities and reconciliation workflows.
Where should official treatment be checked?
Use current ATO guidance and seek professional advice for uncertain payment types.
Does STP replace the need to review qualifying earnings?
No. STP reporting and super calculation are related but different processes.
What should employers read next?
Read the Payday Super 2026 guide.
For payroll support in Epping and Melbourne, review TNS Accounting Payroll Services.
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