From 1 July 2021, there will be an increase to the National Minimum Wage, the high income threshold, the superannuation guarantee contribution rate and the maximum contribution base.
National Minimum Wage
From 1 July 2021, the National Minimum Wage will increase by 2.5% to $772.60 per week (based on a 38-hour work week) or $20.33 per hour.
The modern award minimum wages will also increase by 2.5%. For most awards, this increase will take effect from the first full pay period on or after 1 July 2021. However, the increase to the General Retail Industry Award 2020 will take effect from 1 September 2021. Further, for those awards relating to accommodation and food services, arts and recreation services, tourism, and fitness, the increase will take effect from 1 November 2021.
High Income Threshold
From 1 July 2021, the high income threshold will increase from $153,600 to $158,500.
The high-income threshold is significant for several reasons, including the following:
- Employees who are not covered by a modern award or subject to an enterprise agreement and who receive annual earnings above 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:
(a) 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
(b) half the amount of the high-income threshold immediately before the dismissal (ie $79,250 if the dismissal occurs on or after 1 July 2021).
In calculating whether an employee earns more than the high income threshold, what is included is the employee’s wage, amounts applied or dealt with in any way on the employee’s behalf or as the employee directs (ie 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 (ie commissions, bonuses and overtime), reimbursements and compulsory superannuation contributions.
Superannuation Guarantee Contribution Rate and Maximum Contribution Base
From 1 July 2021, the statutory superannuation guarantee contribution rate will increase from 9.5% to 10%. This rate is set to continue until 1 July 2022, when it is due to increase to 10.5%. The maximum superannuation contribution base will also increase from 1 July 2021 to $58,920 per quarter.
Employers must consider how these increases will impact their remuneration arrangements with their employees. If you require any assistance with this, Addisons’ employment law team can help.
Liability limited by a scheme approved under Professional Standards Legislation.
© ADDISONS. No part of this document may in any form or by any means be reproduced, stored in a retrieval system or transmitted without prior written consent. This document is for general information only and cannot be relied upon as legal advice.