On 1 July 2025, changes to the high income threshold, the superannuation contribution rate, the national minimum wage and more, took effect.
High Income Threshold
The high income threshold increased from $175,000 to $183,100.
The high income threshold is important for a number of reasons, including the following:
- Employees who are not covered by a modern award or subject to an enterprise agreement, and who earn more than the high income threshold, are unable to make an unfair dismissal claim.
- The maximum amount of compensation payable for a successful unfair dismissal claim is capped at the lower of:
- the amount of remuneration received by the employee (or the amount the employee was entitled to receive, whichever is higher) in the 26 weeks before the dismissal; or
- half the amount of the high income threshold immediately before the dismissal (i.e., $91,550 if the dismissal occurs on or after 1 July 2025).
In calculating whether an employee earns more than the high income threshold, what is included is the employee’s wages, amounts applied or dealt with in any way on the employee’s behalf or as the employee directs (i.e., salary sacrifice amounts) and the value of non-monetary benefits received by the employee. What is not included are payments which cannot be determined in advance (i.e., commissions, bonuses, and overtime), reimbursements, and compulsory superannuation contributions.
Superannuation Contributions
The statutory superannuation contribution rate increased from 11.5% to 12% and the maximum superannuation contribution base decreased to $62,500 per quarter.
National Minimum Wage
The national minimum wage increased to $948 per week (based on a 38-hour work week) or $24.95 per hour.
Tax-free Limit for Genuine Redundancy Payments
The tax-free limit for a genuine redundancy payment increased to $13,100 (base limit) plus $6,552 for each completed year of service.
Changes to Paid Parental Leave
The government paid parental leave increased to 24 weeks based on a 5-day work week (or 120 days). A superannuation contribution will also be added to the payment.
If you require any assistance with employment law matters, contact Addisons’ employment law team.