Is the SCHADS Sleepover Allowance Subject to Super? And the Broken Shift Allowance?

Under payday super, the super guarantee is 12% of QE, and each contribution must be received by the worker's fund within 7 business days of payday (ATO payment deadlines). For most award employers QE sits close to OTE (ordinary time earnings), and the ATO says there are "no changes to what payments are considered ordinary time earnings under Payday Super" (ATO qualifying earnings page).

The old OTE ruling, SGR 2009/2, was withdrawn from 1 July 2026. Its replacement, draft LCR 2026/D1, is a draft for public comment, not a final ruling. That matters here because the only ATO document we found on sleepover super was written against the old ruling. For the wider rules, see our payday super guide for SCHADS providers.

Sleepover allowance (clause 25.7(d)). 4.9% of the standard rate for each night on which the employee sleeps over: $62.87 per sleepover from 1 July 2026. If the employee is required to work during the sleepover, clause 25.7(e) pays that time at the prescribed overtime rate, with a minimum payment as for one hour. See our sleepover pay guide.

Broken shift allowance (clause 20.12). 1.7% of the standard rate ($21.81) per broken shift with one unpaid break, or 2.25% ($28.87) with two, paid on top of the hours worked. See our broken shift guide.

• The 2019 ATO advice. In an edited private advice dated 19 February 2019 (EV 1051484058601), the ATO said the clause 25.7 allowance "is not paid for hours worked, but rather as a compensation for staying at a client's premises overnight". It concluded the allowance relates to hours outside ordinary hours and is not OTE.
• Disturbance work is overtime. Clause 25.7(e) pays work during a sleepover at overtime rates, which the 2019 advice took to show the sleepover period is not ordinary hours. The ATO also says overtime is not QE where ordinary hours are clearly identified.
• The draft ruling's exception. Draft LCR 2026/D1 (paragraph 51) treats flat allowances as OTE "except to the extent that they relate solely to hours of work other than ordinary hours of work". It says an availability allowance paid solely for non-ordinary hours is not OTE (paragraph 85). If a sleepover is outside ordinary hours, the allowance fits that exception.
• Jats Joint. On 20 March 2026 the Full Federal Court (Fair Work Ombudsman v Jats Joint Pty Ltd [2026] FCAFC 25) held that a sleepover is not part of the shifts either side of it for the night shift loading in clause 29.3(b), observing that "the language of cl 25.7(d) implies that sleeping over does not itself constitute performing work" (paragraph 34). It is context only: it decided a loading question, not a super question, on the pre-1 June 2026 award, and its reasoning that a sleepover is a break between shifts has been overtaken by clause 25.4(c), which now says it is not.

• It is a flat amount. The ATO's qualifying earnings page treats task and adverse-conditions allowances as QE, and also allowances paid whether or not the employee incurred an expense or "where the allowance amount has no relationship to the actual cost incurred by the employee". The sleepover allowance is a fixed 4.9% of the standard rate per night. That last table row is written about expense-type allowances, so applying it here is an argument by analogy, not an ATO statement.
• The default is in, not out. Draft LCR 2026/D1 (paragraph 32) says earnings are in respect of ordinary hours unless they are referable only to overtime or other non-ordinary hours. Paragraph 36 adds that earnings need not come from actually working particular hours to be OTE.
• The exception rests on an inference. The award does not say in terms that a sleepover is outside ordinary hours. In Jats Joint the court noted that clauses 25.1, 25.2 and 25.7 do not expressly make a sleepover "ordinary hours of work" or "work" (paragraphs 32 and 33). Reading it as non-ordinary time is reasoning from the clauses, not a stated rule.

• It was advice to one taxpayer. The ATO's disclaimer says the edited version "should not be regarded as indicative of the ATO's current views", is "not binding" and that "You cannot rely on this record in your tax affairs".
• It relied on SGR 2009/2, which was withdrawn from 1 July 2026.
• It predates PR798459. That 1 June 2026 variation changed how a sleepover sits within a shift (clauses 25.1(c), 25.4 and 28.1(b)). The allowance in clause 25.7(d) was not itself changed, but we have found no ATO statement on whether the 2019 reasoning survives.
• It does not name the award, referring only to "the Award" and clause 25.7.

The ATO has not addressed the clause 20.12 allowance. We searched the text of draft LCR 2026/D1 and found no mention of broken shifts or sleepovers. The nearest ATO principles are those above: draft LCR 2026/D1 treats flat allowances as OTE unless they relate solely to hours other than ordinary hours, and the qualifying earnings page treats task allowances (for work effort, skills or adverse conditions) as QE.

A broken shift is a rostered day worked in two or three periods with unpaid breaks between them (clause 25.6), and the allowance is a fixed amount for working that pattern, on top of pay for the hours. On that reasoning it points toward QE. This is reasoning from general principles, not a ruling.

1. Pick a position deliberately. Decide whether each allowance is QE and record the reasoning, sources and date. For certainty, ask the ATO for a private ruling or your tax adviser.
2. Apply it consistently. Set the "exempt from super" flag on the sleepover and broken shift pay items in payroll to match your decision, for every worker. A pay item that is QE but ticked exempt creates a shortfall on every pay run it is paid.
3. Size the exposure. If the allowances are QE, 12% of $62.87 is $7.54 per sleepover, and 12% of $21.81 and $28.87 is $2.62 and $3.46 per broken shift. Small per shift, but it adds up across a roster.
4. Correct promptly if you change position. The ATO's first-year guidance (PCG 2026/1) rates an allowance that was paid but misclassified and left out of QE as low risk. Pay the unpaid super to the fund and update STP, or pay the charge if you have received an assessment. The ATO says it focuses on whether you corrected the error and how quickly.

If the allowance was never paid, fix the wages first. Unpaid wages carry no super until they are paid, so an underpayment is not a late-super event while it is unpaid. For an employee not paid an allowance that is QE, the ATO says to pay it in the next pay period: "There is no unpaid super guarantee as long as the amount is received by the employee's fund within 7 business days after the allowance is paid. We will not take any compliance action." If the back pay is an out-of-cycle payment, super on its QE part is due by the deadline for your next regular payday. Super goes to the fund, not the worker, so show it as a separate line, not as part of what the worker is owed.

• QE: base pay for ordinary hours, casual loading, shift loadings and weekend and public holiday penalties for ordinary hours, and the first aid allowance (clause 20.6).
• Not QE: overtime where ordinary hours are clearly identified (if they are not, all hours count; see casual overtime and super); the per-kilometre vehicle allowance ($1.05/km, a temporary rate to 28 February 2027; $1.01 otherwise), which is likely not QE by analogy with draft LCR 2026/D1 Example 14, a per-kilometre travel reimbursement; and other expense reimbursements.
• ATO has not ruled on the SCHADS version: the laundry allowance (clause 20.3), meal allowance (clause 20.5) and on-call allowance (clause 20.11). The ATO's general on-call line turns on hours: QE if for ordinary hours, not QE outside them.

General information as at 14 October 2026, not legal or tax advice. Confirm your treatment with the ATO or a registered tax adviser before relying on it.