The new financial year brings a number of new pay rates and thresholds to the workplace, commencing on 1 July 2014. We recommend that you review your arrangements to ensure compliance.
New minimum wage and award rates
Minimum rates in modern awards and the minimum wage for employees not covered by an award or agreement will rise by 3%.
For award and agreement free employees, this means the minimum wage will be $640.90 per week or $16.87 per hour.
In addition, the casual loading for award and agreement free employees will increase by 1% to 25%.
The Fair Work Commission based their decision to increase rates on “the deterioration in the relative living standards of award-reliant workers, the needs of the low paid, the recent widespread improvement in labour productivity growth, the historically low levels of real unit labour costs and the absence in aggregate of costs pressures”.
Minimum superannuation contributions will increase from 9.25% to 9.5% of employees’ ordinary time earnings.
Superannuation contributions are currently scheduled to continue increasing by .5% each year until the entitlement reaches 12% in July 2019.
However, the present Federal Government has pledged to take steps keep the rate at 9.5% until 30 June 2018. This proposal has not yet become law.
High income threshold
The high income threshold has been increased to $133,000 per annum. Employees earning in excess of this amount:
- may be offered a Guarantee of Annual Earnings which excludes application of any otherwise relevant award to their employment; and
- may not bring an unfair dismissal claim (unless they are covered by an award or enterprise agreement. Please note that an employee who is subject to a Guarantee of Annual Earnings is still able to make an unfair dismissal claim).
By way of summary, the following will usually form part of income for purposes of the high income threshold: wages, amounts applied or dealt with on the employee’s behalf, and agreed monetary values of non-cash benefits, such as company cars and mobile phones.