Important News

High income threshold increases from $133,000 to $136,700

26 June 2015

High income threshold increases from $133,000 to $136,700

From 1 July 2015 the High Income Threshold will increase from $133,000 to $136,700. The maximum amount of compensation that an Applicant can be awarded will increase to $68,350.

Determining an employee’s earnings for the purposes of the High Income threshold

Pursuant to section 332 of the Fair Work Act 2009 (Cth) (FW Act) an employee’s earnings includes:

  • wages;
  • money that is applied or dealt with on their behalf (e.g salary sacrificing, additional superannuation); and
  • non-monetary benefits with an agreed value (e.g car, mobile phone etc).

An employee’s earnings does not include:

  • payments which cannot be determined in advance (e.g bonuses, commission etc);
  • reimbursements; or
  • superannuation contributions.

What does this mean for your business?

  • An employee earns more than the High Income Threshold and is not covered by an Enterprise Agreement or Modern Award will not be protected from unfair dismissal under the FW Act.
  • Employers should keep this figure in mind when conducting their annual remuneration reviews as employees previously not covered by unfair dismissal protections may now be covered as a result of the increase.
  • Employers should also take note of the definition for earnings when assessing if an employee is covered by the unfair dismissal protections in the FW Act. In particular employees who earn more than $136,700 may still be covered by unfair dismissal protections if their remuneration consists of:
    • bonuses or commission payments that can’t be determined in advance; or
    • a car allowance in circumstances where the vehicle is required to perform their job.

If you require advice or clarification, please call PCS on 02 8094 3100

Posted in Strategic HR Consulting.
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