From 1 July 2016, the high income threshold and maximum superannuation contributions base will increase.

High Income Threshold

On 1 July 2016, the high income threshold will increase from $136,700 to $138,900 per annum.

The high income threshold is important for the following reasons:

  1. Employees that are not employed pursuant to a modern award or enterprise agreement and who receive annual earnings above the high income threshold are unable to make a claim for unfair dismissal.
  2. Employees that are employed pursuant to a modern award, do not receive modern award entitlements and have annual earnings above the high threshold amount can make an unfair dismissal claim.
  3. The maximum amount of compensation payable for a successful unfair dismissal claim is capped at the lower of, half the amount of the dismissed employee's wage or half the amount of the high income threshold, which is $69,450 after 1 July 2016.

In determining whether an employee earns more than the high income threshold what is included is an employee's wage and other amounts applied or dealt with as salary sacrifice amounts and the value of non-monetary benefits received by the employee.  What is not included are payments which are not set in advance such as commissions, bonuses, overtime and compulsory superannuation contributions.

Superannuation Contributions Base

From 1 July 2016, the maximum superannuation contribution base increases to $51,620 per quarter.  An employer is required to contribute 9.5% of an employee's ordinary time earnings to a superannuation fund nominated by the employee but only up to the maximum superannuation contribution base, per quarter.