Glossary
Ordinary Time Earnings
Ordinary time earnings (OTE) are what you earn for your ordinary hours of work, and they are the base your 12% super guarantee is calculated on. Overtime is excluded, which surprises almost everyone who works it.
What it is
Ordinary time earnings (OTE) are the earnings your employer uses as the base for the superannuation guarantee. In plain terms, OTE is what you earn for your ordinary hours of work: your base wage or salary, most allowances, shift loadings, commissions, bonuses tied to ordinary hours, and paid leave all count. Genuine overtime does not count, and neither do expense reimbursements. The distinction sounds administrative, but it decides how much super lands in your fund every quarter.
The 12% super guarantee is calculated on OTE, not on your gross pay or your package figure. That is why a payslip stacked with paid overtime shows a super line that looks oddly small next to the big gross number. The ATO publishes the official checklist of which payments count as OTE and which do not, and it is more nuanced than most payroll websites suggest; some payments labelled bonuses or loadings behave differently depending on what they reward. When in doubt, the authoritative list lives on ato.gov.au, cross-checked against moneysmart.gov.au.
Key takeaways
- Ordinary time earnings are pay for ordinary hours: base salary, most allowances, loadings, commissions and paid leave all count.
- Genuine overtime and expense reimbursements are expressly excluded from OTE, so they boost your gross but not your super.
- The 12% superannuation guarantee is calculated on OTE, which is why overtime-heavy payslips show a small super line.
- The ATO publishes the official checklist of payments that count as OTE; payroll software occasionally gets edge cases wrong.
- If most of your income is overtime, your employer super lags expectations, and voluntary concessional contributions fill the gap.
How it works
Each pay cycle, payroll assembles your OTE from the payment types on your payslip. Base hourly or salaried pay for ordinary hours goes in. Allowances that are not expense reimbursements, shift and weekend loadings, commissions, piece rates and leave payments usually go in too. Bonuses are the classic edge case: a bonus rewarding ordinary hours of work counts, while one paid purely for overtime does not.
Overtime is the big exclusion, and it is deliberate. The ATO test depends on what the payment is actually for, not what the payslip label says, so a payment named loading can still be excluded if it genuinely compensates overtime hours. Genuine expense reimbursements, such as being paid back for a work tool you purchased, are also excluded because they are not earnings at all.
Once OTE is assembled, the employer multiplies it by 12% and sends that to your super fund at least quarterly. On $65,000 of OTE, that is $7,800 a year. Two workers with identical gross pay can receive wildly different super if one earns it through overtime and the other through ordinary hours, and both payslips show it plainly once you know where to look.
Why it matters
OTE is the invisible filter between your payslip and your retirement. If your industry runs on overtime, such as construction, nursing, logistics or hospitality, a large slice of what feels like your income earns zero super for you. A worker doing heavy overtime for a decade can retire with tens of thousands less than a colleague on the same gross figure earned through ordinary hours. Nothing unlawful happened; the definition of OTE did exactly what it was written to do.
A colleague named Brent (yes, that Brent) spent four years bragging about grossing $95,000 on a $70,000 base through weekend overtime. He budgeted his retirement projection off $95,000 until I showed him his super was 12% of $70,000, a gap of roughly $3,000 a year in contributions. Over his remaining career, before earnings, that gap casually strolls past $100,000. His response involved language the style guide forbids me from reproducing.
The highest-leverage move is checking your own mix once: compare the super line against 12% of your ordinary-hours pay, and model the difference with the superannuation calculator. If overtime dominates your income, plug the gap deliberately rather than discovering it at fifty-five, and read your full payslip picture via the take home pay calculator.
Real-world examples
$70,000 base plus $25,000 overtime: super gap of $3,000 a year
A tradie on a $70,000 base grosses $95,000 after consistent weekend overtime. OTE excludes the overtime, so employer super is 12% of $70,000: $8,400 a year. If the whole gross qualified, it would be $11,400, so the overtime exclusion quietly costs $3,000 a year in contributions. Over twenty years at a 7% return, that gap compounds to roughly $130,000 less at retirement. Run the two scenarios side by side with the superannuation calculator.
Allowances and loadings on a $58,000 retail role
A retail manager earns $58,000 base plus a $4,000 annual managerial allowance and $3,000 in Sunday loadings, with overtime of $5,000 on top. OTE is $65,000: base plus allowance plus loadings, excluding only the genuine overtime. Employer super is 12% of $65,000, or $7,800 a year, paid quarterly as $1,950. The worker who assumed the $5,000 overtime also counted overestimates their annual super by $600, enough to notice on a fund statement if anyone ever reads one.
Two nurses, same $92,000 gross, different super
Two nurses both gross $92,000. Nurse A earns it as straightforward salary. Nurse B earns a $74,000 base plus $18,000 of overtime. Nurse A receives about $11,040 in employer super; Nurse B receives $8,880, a $2,160 annual shortfall from the same gross pay. Nurse B can close it with voluntary concessional contributions, taxed at 15% inside the fund and counted toward the $30,000 cap. The ATO OTE checklist on ato.gov.au confirms both calculations are perfectly correct.
Common mistakes
Mistake: Assuming gross pay and OTE are the same number.
Why it bites you: Overtime and reimbursements sit in your gross but outside OTE. On $95,000 gross with $25,000 of overtime, your super base is $70,000, about $3,000 a year less in employer contributions than the headline suggests.
Mistake: Assuming every payment labelled overtime is excluded, or every payment labelled allowance is included.
Why it bites you: The ATO tests what the payment compensates, not the payslip label. A miscategorised loading on $60,000 can shift your super by hundreds a year, and the checklist on ato.gov.au is the arbiter.
Mistake: Planning retirement savings off the overtime-inflated gross.
Why it bites you: Overtime evaporates when you change jobs, get injured or slow down. Budgeting super projections off $95,000 when your OTE is $70,000 leaves a six-figure retirement shortfall compounding quietly for decades.
Mistake: Never noticing when payroll misclassifies an allowance.
Why it bites you: A wrongly excluded $4,000 allowance costs $480 a year in employer super; over ten years with earnings, thousands. Reconciling your payslip against the fund statement quarterly is the only reliable catch.
Ivy's take
I spent an afternoon reading the entire ATO OTE checklist, every payment type from annual leave to jury top-up, so you don't have to. The document is a masterpiece of administrative pedantry and I mean that as a compliment. Whether a bonus counts depends on what it rewards, which is the sort of question that ruins barbecues.
My verdict: OTE is the most consequential number on your payslip that nobody reads. Gross pay is theatre; OTE is the real super base. If overtime is your whole margin, treat employer super as the floor and top it up yourself. Brent is still citing his gross figure in arguments, which tells you everything about how that retirement plan ends.
Related jargon, defined
- Ordinary hours
- The hours your award, agreement or contract defines as standard, excluding overtime.
- Superannuation guarantee
- The compulsory 12% of OTE your employer must pay into your super fund.
- Shift loading
- Extra pay for working ordinary hours at unsociable times; normally counts as OTE.
- Allowance
- A payment for conditions or duties of ordinary work; usually counts as OTE unless it reimburses expenses.
- Expense reimbursement
- Being repaid for a cost you incurred for work; not earnings, so never OTE.
- Gross pay
- Everything paid to you before tax, including payments excluded from OTE like overtime.
Frequently asked questions
Does overtime count toward my ordinary time earnings?+
No, genuine overtime is expressly excluded from OTE by the ATO definition. That means big overtime weeks lift your gross pay but not your employer super. The exclusion is the single most common source of payslip confusion in overtime-heavy industries.
Do allowances and loadings count as OTE?+
Usually yes. Allowances paid for your ordinary work conditions or duties, and loadings for working ordinary hours at odd times, are generally included. Allowances that genuinely reimburse expenses are not; the ATO checklist on ato.gov.au lists the borderline cases.
Do bonuses count toward ordinary time earnings?+
It depends on what the bonus rewards. A bonus tied to ordinary hours of work counts as OTE, while one paid purely for overtime does not. When in doubt, check the ATO guidance or ask payroll how the payment type is configured.
Why is my super line smaller than 12% of my gross pay?+
Because super is 12% of OTE, and your gross includes payments excluded from OTE, most often overtime. Divide the super figure by 0.12 to reverse-engineer the OTE your payroll used. If that number still looks wrong, cross-check the payment types against the ATO list and raise it with payroll.
Does paid annual leave count as OTE?+
Yes, payment for ordinary hours of annual leave, sick leave and other paid leave is OTE, so your super keeps accruing while you are on holiday. Leave loading can be an edge case depending on whether it compensates lost overtime. Check loading phrasing against the ATO checklist if yours looks odd.
Disclaimer: This information is general in nature and does not constitute financial or legal advice. Always consult a qualified professional for your specific situation.
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Ivy Sinclair-Wren
Financial Chaos Analyst
Ivy Sinclair-Wren is a Financial Chaos Analyst covering investing, AI, wealth psychology, and the emotional consequences of opening finance apps during market crashes. Based in Melbourne, she specializes in demystifying the Australian tax code and helping users navigate the intersection of spreadsheet logic and human irrationality.