Payday Super doesn’t just change when super is paid. It also changes how super is calculated.
If you employ staff, it’s important to understand these updates because they may affect how super is calculated for some employees from 1 July 2026.
From OTE to Qualifying Earnings
Under the current system, super guarantee is generally calculated as 12% of an employee’s “ordinary time earnings” (OTE).
OTE typically includes things like:
- Base salary and wages
- Commissions
- Shift loadings
- Certain allowances
and generally excludes overtime.
From 1 July 2026, the calculation moves to “qualifying earnings” (QE), which is a broader definition.
QE combines OTE with salary sacrifice contributions and some additional amounts already connected to super guarantee calculations.
For many employees on straightforward pay arrangements, the practical difference may be minimal. However, businesses with salary sacrifice arrangements, bonuses, variable earnings, or more complex pay structures may notice some changes.
The Maximum Contribution Base Is Also Changing
Another important update relates to the maximum super contribution base (MSCB).
Currently, the MSCB applies quarterly. If an employee earns above the quarterly threshold, employers are generally not required to pay super on earnings above that limit.
Under Payday Super, this moves to an indexed annual threshold instead.
For some businesses, this may slightly change super obligations for higher-income employees, particularly where large bonuses or irregular payments are involved.
For others, it may simplify calculations by removing the need to monitor quarterly thresholds throughout the year.
Super Will Be Calculated Every Pay Cycle
Under Payday Super, super will also be calculated on a per-payday basis rather than quarterly.
This means payroll systems will need to:
- calculate qualifying earnings accurately each pay run
- apply the correct super rate
- process contributions within the required payment timeframe
Businesses with employees on variable hours, fluctuating earnings, or irregular payment arrangements may need to review their payroll setup more closely to ensure everything is working correctly.
How to Prepare
There are a few practical steps businesses can start taking now:
- Review employee pay structures and salary sacrifice arrangements
- Identify employees who may be affected by the annual MSCB changes
- Check whether payroll systems are prepared for QE calculations
- Talk with your accountant or payroll provider about the changes
Starting early gives businesses more time to review processes and make adjustments gradually before July 2026.
Get Clarity Before the Changes Begin
While these updates may sound technical, they can have practical implications for payroll and super calculations across your business.
If you’re unsure how the changes may apply to your employees or payroll setup, our team is here to help.
We can review your payroll structure, discuss the new calculation rules, and help you prepare well ahead of Payday Super coming into effect.
