From 1 July 2026, changes to the high income threshold, the maximum superannuation contributions base, the national minimum wage and more, will take effect.
High Income Threshold
The high income threshold will increase from $183,100 to $190,100.
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., $95,050 if the dismissal occurs on or after 1 July 2026).
- Employees who earn more than the high income threshold are not subject to the limitations on set-term contracts under the Fair Work Act 2009 (Cth).
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 will remain at 12%, however, the maximum superannuation contribution base will increase to $270,830 per annum. The Payday Super changes will also take effect, requiring employers to make superannuation contributions on the same day they pay their employees their usual wages, replacing the old quarterly payment system.
National Minimum Wage
The national minimum wage will increase to $1,004.90 per week (based on a 38-hour work week) or $26.44 per hour.
Tax-free Limit for Genuine Redundancy Payments
The tax-free limit for genuine redundancy payments will increase to $13,598 (base limit) plus $6,801 for each completed year of service.
Changes to Parental Leave Pay
Eligible employees will be entitled to a maximum of 130 days of Parental Leave Pay at the national minimum wage for children born or adopted after 1 July 2026.
Changes to Work Health and Safety Laws in NSW
From 1 July 2026, compliance with any approved Code of Practice in NSW by a person conducting a business or undertaking (PCBU) will become mandatory. A PCBU may only depart from an approved Code of Practice and manage hazards and risks in a different way if that alternative method provides an equivalent or higher standard of safety than that set out in the Code of Practice.
If you require any assistance with employment or safety law matters, contact a member of the Addisons’ employment law team.