The High Income Threshold and the unfair dismissal link

From 1 July 2017, the maximum salary an employee can be paid and still be eligible to lodge an unfair dismissal application has increased to $142,000.00 per annum (up from the previous year’s $138,900.00). This is known as the high income threshold.

The new threshold amount also has implications on the maximum compensation amount the Fair Work Commission can award in an unfair dismissal matter. From 1 July 2017, this maximum compensation amount is $71,000.00 (calculated from 6 months’ salary at the high income threshold).

There’s a number of terms and conditions that accompany calculations around an employee’s high income threshold. These include wages, non-monetary benefits (such a company vehicle), salary sacrifice payments, incentives, overtime and commissions, whether the employee is covered by an award or enterprise agreement and whether there may be a written agreement concerning a guarantee of annual earnings in place. While it’s not necessary to memorise the full list, an awareness of the existence of the threshold and where you can find accurate information is crucial in managing your business risk.

Feel free to contact Bare Bones Consulting on the high income threshold and what risk your business may carry when you have employees earning under threshold of $142,000.00 per annum…we’re strongly behind the old “prevention is better than cure” adage when it comes to managing workplace risk…particularly around unfair dismissal scenarios!