Payroll - Pay Day Super & Qualifying Earnings (QE)
From 1 July 2026, Single Touch Payroll (STP) introduces the reporting of Qualifying Earnings (QE) as part of the Australian Government's Pay Day Super initiative.
Qualifying Earnings represent the earnings that are used to determine an employee's superannuation entitlement. The payroll system has been updated to automatically calculate and report the QE amount for payroll users, provided the pay types and allowances are correctly configured.
Important: QE reporting only applies to pay events with a payment date on or after 1 July 2026. Earlier pay events are not affected.
What is Pay Day Super?
Pay Day Super is an Australian Government reform that aims to improve the timing of employer superannuation reporting and payments.
As part of this reform, employers are required to report a new Qualifying Earnings (QE) amount through Single Touch Payroll (STP). QE represents the earnings that are eligible for superannuation and is used to support the new Pay Day Super reporting requirements.
The payroll system automatically calculates the QE amount based on the configuration of pay types, allowances and other payments.
Pay Type Classification
A new Classification field has been introduced for all pay types to simplify the Qualifying Earnings calculation.
Each pay type must be assigned one of the following classifications:
| Classification | Description | Included in QE |
|---|---|---|
| Ordinary Time Earnings (OTE) | Normal earnings and ordinary hours worked. | Yes |
| Overtime (OT) | Overtime payments. | No |
| Paid Leave (PL) | Annual Leave, Personal Leave, Long Service Leave, RDO, TOIL and other paid leave. | Yes |
| Parental Paid Leave (PPL) | Government or employer funded parental leave. | No by default. Can be overridden if required. |
| Workers Compensation (WC) | Workers compensation payments. | No |
| Other / Unclassified (UC) | Payments that do not fall into another category. | No |
The payroll system automatically determines whether each payment contributes to Qualifying Earnings based on its classification.
Allowance Configuration
Each allowance now includes a Super / QE setting to determine whether the allowance contributes to Qualifying Earnings.
| Setting | Included in QE |
|---|---|
| No | No |
| Yes (OTE) | Yes |
| Yes (Awards) | No |
Only allowances configured as Yes (OTE) are included in the Qualifying Earnings amount reported through STP.
Other Payments
The following Other Payment types are automatically included when calculating Qualifying Earnings:
- Bonus
- Commission
- Directors' Fees
- Back Payment (Salary)
The following payment types are excluded from Qualifying Earnings:
- Back Payment (Overtime)
- Return to Work Payment
Automatic QE Calculation
If you use the payroll module, the system automatically calculates the Qualifying Earnings amount for every pay run using the configured pay types, allowances and other payments.
No manual calculation is required unless adjustments are made outside of the standard payroll process.
Manual STP Reporting
If you create STP events manually and do not use the payroll module, the system cannot determine the Qualifying Earnings automatically.
You must manually calculate the employee's Qualifying Earnings and enter the value into the QE field before lodging the STP report.
If Gross Earnings have been entered but the QE field remains zero, the system will display a warning before submission.
Summary of Changes
- QE reporting commences from 1 July 2026.
- New Pay Type Classification simplifies QE calculation.
- Allowance configuration now determines QE inclusion.
- Other Payments automatically include or exclude QE where applicable.
- Payroll users receive automatic QE calculation.
- Manual STP users must enter the QE amount themselves.