From 1 July 2022, there will be increases to the high income threshold, the superannuation contribution rate and the maximum superannuation contribution base.
High Income Threshold
On 1 July 2022, the high income threshold will increase from $158,500 to $162,000.
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 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:
- 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 (ie $81,000 if the dismissal occurs on or after 1 July 2022).
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.
On 1 July 2022, the maximum superannuation contribution base will increase to $60,220 per quarter and the statutory superannuation contribution rate will increase from 10% to 10.5%. This rate is set to continue until 1 July 2023, when it is due to increase to 11%.
Further, as from 1 July 2022, there will no longer be a minimum earnings requirement of $450 per month, meaning that employers will be required to make superannuation contributions on behalf of their employees regardless of how little their employees are paid.
If you require any assistance with employment law matters, contact Addisons’ employment law team.