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Employment related threshold changes effective
1 July 2013
A number of employment related financial thresholds are indexed annually each 1 July. Below is a summary of some important changes effective 1 July 2013.
High income threshold
Why is the high income threshold important?
Employees who earn more than the high income threshold
and who are not covered by a modern award or enterprise agreement are not able to access the unfair dismissal jurisdiction.
An unfair dismissal claim is the most common form of challenge to a termination of employment.
For employees covered by a modern award, where the employer can guarantee they will earn more than the high income threshold, the employer and employee can enter into a guarantee of annual earnings, excluding
that employee from modern award coverage. However, the employee can still make an unfair dismissal claim.
What is included in the high income threshold?
An employee's earnings include:
- Wages
- Money that is paid on their behalf (eg: superannuation top ups or salary sacrifice)
- The agreed value of non-monetary benefits (eg: laptop or mobile phone).
An employee's earnings do not include:
- Payments the amount of which cannot be determined in advance (eg: commissions, bonuses or overtime unless guaranteed)
- Reimbursements
- Superannuation contributions that the employer is required to make.
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2012/2013 financial year
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2013/2014 financial year
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$123,300 per annum
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$129,300 per annum
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The compensation limit for unfair dismissal claims increases to $64,650.
National Minimum Wage (before statutory superannuation)
The national minimum wage is the minimum weekly wage payable to employees not covered by a modern award or enterprise agreement.
For modern award covered employees, minimum wages are increased by 2.6% rounded to the nearest 10 cents.
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2012/2013 financial year
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2013/2014 financial year
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$606.40 or $15.96 per hour
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$622.20 or $16.37 per hour
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Tax free threshold for "genuine redundancy" payments
Where the redundancy of an employee is treated by the Australian Tax Office as a 'genuine redundancy' under section 83-175 of the Income Tax Assessment Act 1997, certain tax-free thresholds will apply to the
payment (see Taxation Ruling TR 2009/2).
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2012/2013 financial year
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2013/2014 financial year
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First $8,806 tax free and $4,404 tax free for each completed year of service
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First $9,246 tax free and $4,624 tax free for each completed year of service
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Superannuation - maximum contribution base
For the 2013/2014 financial year, employers must pay into each eligible employee's super account a minimum of 9.25% of the employee's ordinary time earnings up to the 'maximum contribution base.' This is an
increase from 9% which was the amount payable in the 2012/2013 financial year.
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2012/2013 financial year
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2013/2014 financial year
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$45,750 per quarter
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$48,040 per quarter
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Superannuation - concession contribution cap
Employers make concessional contributions (e.g. SG contributions and salary sacrifice contributions) on behalf of their eligible employees. Concessional contributions up to the cap are generally taxed at 15%
whereas contributions in excess of the cap are taxed at the highest marginal tax rate plus the Medicare Levy.
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2012/2013 financial year
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2013/2014 financial year
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Regardless of the employee's age concessional contribution cap $25,000 per annum
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Employees under age of 60 concessional contribution cap $25,000 per annum.
Employees aged 60 or over concessional contribution cap $35,000 per annum.
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If you would like more information in relation to any of the new employment related thresholds and in particular how to determine with certainty whether an employee's
earnings exceed the high income threshold and thus whether he or she can access the unfair dismissal jurisdiction please contact:
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For information on our Workplace Relations and Safety Group click here.
Important disclaimer: The material contained in this publication is of a general nature only and is based on the law as at 2 July 2013. It is not, nor is intended to be, legal advice. If you wish to take any action based on the content of this publication we
recommend that you seek professional advice.
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