✨ What are Qualifying Earnings?
Under Payday Super, super guarantee and super payments made under collective agreements, are calculated from an employee's qualifying earnings (QE). Qualifying earnings is a new STP reporting category which includes payments from ordinary hours of work, and some other payments. QE must be reported to the ATO as part of your pay runs and other STP submissions.
Learn more about what payments are qualifying earnings.
✨ What's changed in Reckon One?
Reporting of Qualifying Earnings
We have introduced a new 'Report as Qualifying Earnings' checkbox when you create or edit earnings, allowances or leave pay items. Selecting this checkbox on items will ensure they will be reported to the ATO as qualifying earnings under the new Q code when sent in a pay run, update event or EOFY finalisation.
You must update your relevant pay items in Reckon One so they are reported as qualifying earnings.
Super calculations
There are no changes to how super is calculated in Reckon One.
As you continue to indicate which earnings, allowances, and leave items include super, Reckon One will continue to calculate super on those pay items, whether they're reported as QE or not.
In most cases, pay items that are QE will include super guarantee and super from collective agreements. You may have some employees that have super paid on earnings that aren't QE, for example overtime typically isn't qualifying earnings, and under Payday Super, wouldn't normally have super calculated on it. However, if you have an employee under an industrial obligation which specifies that you need to calculate super on overtime, you would need to calculate super on this item, even if you're not reporting it as qualifying earnings. You can do this in Reckon One, simply by leaving the 'Report as Qualifying Earnings' checkbox unticked.
✨ How do I update my pay items to Qualifying Earnings?
Updating your pay items to Qualifying Earnings is super easy and you can either choose to automatically update pay items, or manually update them.
Automatically update your pay items
Reckon One will find all your earning, allowances and leave items that also have a super guarantee or collective agreement super pay item selected in their setup and it will be automatically ticked to 'Report as Qualifying Earnings'.
To automatically update your pay items to report as QE;
- Click the Update and Start Reporting on the Payday Super banner at the top of your Reckon One book. You'll find the banner on the dashboard, pay runs, STP, and pay items screens in your book.
- Select the Auto-Update to start reporting option
- Read the on-screen information and click Update Pay Items
- That's it! Your pay items that have super guarantee selected in their setup will be automatically updated to report for Qualifying Earnings.
Manually update your pay items
If you'd prefer to manually update your pay items to report as qualifying earnings, you'll choose the specific pay items and tick the Report as Qualifying Earnings checkbox on any of those relevant earnings, allowances and leave items.
To manually update your pay items to report as QE;
- Click the Update and Start Reporting on the Payday Super banner at the top of your Reckon One book. You'll find the banner on the dashboard, pay runs, STP, and pay items screens in your book.
- Select the Update manually and tell us to start reporting option then click the Payroll Settings ➡️ Pay Items link which will open in a new tab
- Click on the edit button next to any earnings, allowances and leave items that need to be reported as QE
- Tick the Report as Qualifying Earnings checkbox
- Check that your superannuation preferences section is correct for the respective item
- Click Save & Close. Repeat for all items that require updating for QE.
Once you've finished updating all required pay items, go back to the previous tab and tick the declaration to confirm you have updated your items then click the Complete Update button.
✨ When are Qualifying Earnings reported?
Once you have updated your pay items as QE using either of the above methods, Reckon One will start reporting these pay items (under code Q) whenever you send an STP submission and will take effect:
- From 1 July 2026 if you've automatically or manually updated your QE items before this date.
- Immediately if you automatically or manually update after 1 July 2026
Questions?
Do you have any questions about getting your items setup for Qualifying Earnings? Click HERE to create a new post and we'll do our best to help out 🙂
