What Is OTE in Salary? Ordinary Time Earnings Explained for Awards and the National Minimum Wage

What Is OTE in Salary?

If you’ve ever looked at your payslip and wondered why your super contribution doesn’t match your total pay, the answer often lies in ordinary time earnings (OTE). OTE is the amount your employer pays you for your ordinary hours of work – the hours that are regular and expected under your award or agreement. It’s the figure used to calculate the super guarantee your employer must contribute.

OTE vs total salary

Not everything you earn counts as OTE. The Australian Taxation Office (ATO) provides a detailed list of payments that are OTE and those that are not. For example, overtime payments are excluded from OTE if your ordinary hours are clearly defined in an award or agreement. If they aren’t clearly defined, then all hours you work are treated as ordinary hours. This distinction matters because super is only required on OTE, not on overtime.

Common payments that are OTE:

• Ordinary hours of work (base pay)
• Casual loading
• Shift penalties (including public holiday penalties)
• Commission payments
• Piece rates for work done during ordinary hours
• Performance bonuses, Christmas bonuses, sign-on bonuses
• Certain allowances (e.g., leading hand, first aid, industry allowances paid during ordinary hours)

Payments that are not OTE:

• Overtime (if ordinary hours are clearly identified)
• Annual leave loading that compensates for lost overtime opportunity
• Time off in lieu (TOIL) cashed out during service
• Call-back allowances
• Bonuses paid solely for work outside ordinary hours
• Employer-paid parental leave (maternity, paternity, adoption)
• Fringe benefits (unless salary sacrificed to super)

Awards versus the national minimum wage

The national minimum wage from 1 July 2026 is $26.44 per hour, or $1,004.90 per week. That’s an annualised $52,255, which sits at index 48.2 on the Salary Index. But most Australian employees are covered by a modern award, which sets a higher minimum rate for their classification. For example, the General Retail Industry Award has different pay rates for different levels, often above the national minimum. Award rates also include loadings (e.g., casual loading of 25%) that are part of OTE.

Let’s say you’re a retail employee on a casual award rate of $25.74 per hour (the entry-level award floor). With casual loading of 25%, your actual hourly pay becomes $32.18. That entire $32.18 is OTE because it’s paid for ordinary hours. Your employer must pay super on that amount. If you also work overtime at time-and-a-half, the overtime portion is not OTE (provided ordinary hours are clearly defined).

How the Salary Index uses OTE

The Salary Index benchmarks full-time adult ordinary-time earnings at 100. According to the Australian Bureau of Statistics (Average Weekly Earnings, May 2026), the national average is $2,083.70 per week, or $108,352 per year. If your gross ordinary-time earnings (excluding overtime) are $60,000 a year, your index is about 55.4. That tells you where your pay sits relative to the national line.

Because OTE excludes overtime, your total pay might be higher than your OTE. The index uses OTE to give a consistent comparison across industries and states. For instance, the mining industry has an index of 154.7, while retail trade is 75.9. These figures reflect the average OTE in those sectors, not total remuneration.

Practical example: piece rates and commissions

The ATO gives a clear example: Evan picks apples and is paid $750 for 30 hours of work under a piece rate. Because his ordinary hours aren’t specified in an award, all 30 hours are ordinary hours, and the $750 is OTE. Similarly, a salesperson earning a base salary plus commission has both components counted as OTE, provided the commission is for work during ordinary hours.

Why it matters for your pay check

Understanding OTE helps you check if your super is correct. If you’re on an award, your employer must pay super on your award rate plus any loadings, penalties, and commissions that are OTE. If you have a salary sacrifice arrangement, remember that sacrificing to super keeps that amount in OTE, but sacrificing to other benefits removes it from OTE.

For a deeper look at how different industries and states compare, see our industries and states pages. You can also explore pay guides for award-specific information.

The bottom line

OTE is the foundation for super guarantee calculations. It’s not your total salary – it’s the part that your employer must use to calculate super. By knowing what counts as OTE, you can better understand your payslip, your super balance, and where your pay stands on the national index.