What is OTE in salary? Understanding ordinary time earnings for super and pay

What is OTE in salary?

When you hear the term “OTE” in a salary discussion, it stands for ordinary time earnings. This is a specific legal concept used by the Australian Taxation Office to calculate the minimum super guarantee contribution an employer must pay for an employee. Understanding what is OTE in salary helps you separate the pay you receive for your ordinary hours from other payments like overtime, bonuses, or allowances.

OTE is defined in the Superannuation Guarantee (Administration) Act 1992 as the amount an employer pays an employee for their ordinary hours of work. It includes commissions, shift loadings, casual loading, and piece rates for work done during ordinary hours. It does not include overtime payments, provided the employee’s ordinary hours are clearly identified in an award or agreement. The ATO explains that if overtime cannot be separately identified, all hours worked are treated as ordinary hours.

How OTE differs from the minimum wage

The national minimum wage is a pay floor set by the Fair Work Commission. From the first full pay period on or after 1 July 2026, the adult national minimum wage is $26.44 per hour or $1,004.90 per week for award-free employees. This is the minimum gross pay before tax. However, OTE is not the same as the minimum wage. OTE is a subset of your total salary that determines your super guarantee. For example, if you earn $30 per hour for ordinary hours and $45 per hour for overtime, only the $30 per hour is OTE. The overtime component is not OTE, even though it is part of your total salary.

Award-covered employees may have higher minimum rates than the national minimum. The Fair Work Ombudsman provides Pay Guides that show the specific rates for each classification under a modern award. An enterprise agreement can also set higher rates. The national minimum wage only applies to employees not covered by an award or registered agreement.

What counts as OTE?

The ATO’s list of payments that are ordinary time earnings includes:

• Ordinary hours of work (as defined in an award or agreement)
• Casual loading
• Shift penalties (including public holiday penalties)
• Commissions and piece rates for work during ordinary hours
• Salary sacrificed amounts that would otherwise be OTE (e.g., salary sacrificed to super)

Payments that are not OTE include:

• Overtime payments (if ordinary hours are clearly identified)
• Annual leave loading referrable to lost overtime opportunity
• Time off in lieu (TOIL) cashed out during service
• On-call allowances for hours outside ordinary hours
• Bonuses paid solely for work outside ordinary hours

Super guarantee is on top of OTE

Employers must pay super guarantee at 12% on an employee’s OTE. This is an additional payment on top of the employee’s gross salary. For example, if an employee’s OTE is $1,000 per week, the employer must contribute $120 to super. The super contribution does not reduce the employee’s take-home pay; it is an employer cost. If an employer misses the super guarantee due date, they must calculate the shortfall using salary and wages (which includes overtime) and pay the super guarantee charge.

Award-free juniors and other exceptions

Not every worker receives the adult national minimum wage. Award-free junior employees have percentage-based minimum rates. For example, a 16-year-old award-free junior is entitled to 47.3% of the adult rate, which is $12.51 per hour (or $15.64 casual). Apprentices and trainees have their own rates under the Miscellaneous Award. Some awards also have introductory rates that are lower than the ongoing classification rate, but they cannot fall below $25.74 per hour or $978.10 per week (from 1 July 2026).

Why OTE matters for your pay understanding

Knowing what is OTE in salary helps you check whether your employer is meeting super obligations and whether your pay structure is correct. If you are covered by an award, your ordinary hours are defined in that award. If you are award-free, your ordinary hours are the total hours you are employed to work. The ATO warns that if an employer cannot clearly identify overtime, all hours worked become ordinary hours for OTE purposes.

For more details on which pay floor applies to you, see our Which minimum wage applies guide. You can also compare rates across awards and years in our Rate tables.

Summary

• OTE = pay for ordinary hours (including commissions, shift loadings, casual loading)
• Not OTE = overtime, TOIL cash-out, on-call allowances outside ordinary hours
• Super guarantee = 12% on OTE, paid by employer on top of salary
• National minimum wage = $26.44/h (adult, award-free) from 1 July 2026
• Award or agreement can set higher rates than the national minimum

Always check your specific award or agreement with the Fair Work Ombudsman’s Pay and Conditions Tool. The ATO’s guidance on OTE is the authoritative source for super guarantee calculations.

For the published floors, see the rate tables and how the figures work.