On 1 July every year, there are important changes to a number of employment-related monetary thresholds. The new thresholds are set out below.
High-earner unfair dismissal cap
| 2016/17 | 2017/18 | What this means |
| $138,900 | $142,000 | This is the highest possible income an employee can earn before they are excluded from making an unfair dismissal claim against their employer (unless they are covered by a modern award or enterprise agreement) |
Maximum compensation
| 2016/17 | 2017/18 | What this means |
| $69,450 | $71,000 | Where compensation is payable in an unfair dismissal claim, the amount is capped at the lesser of six months of the employee's pay or exactly half of the current unfair dismissal cap. |
High income threshold
| 2016/17 | 2017/18 | What this means |
| $138,900 | $142,000 | Where an employee is covered by a modern award, their employer can provide a guarantee of annual earnings to pay the employee more than the high income threshold for a period of 12 months. If the employee accepts the guarantee, then the terms of the modern award will not apply to the employee. |
Superannuation
| 2016/17 | 2017/18 | What this means |
| Maximum superannuation contribution base | ||
| $51,620 per quarter | $52,760 per quarter | This base is used to determine the maximum superannuation guarantee that an employer is required to make under super laws. |
| Superannuation Guarantee (minimum employer contribution rate) | ||
| 9.5% | 9.5% | Employers are required to contribute the equivalent of 9.5% of an employee's ordinary time earnings as superannuation guarantee earnings. |
| Concessional (before tax) contributions cap | ||
| $30,000 ($35,000 for anyone 49 years or over) | $25,000 |
This cap includes an employer's compulsory contributions (superannuation guarantee), additional employer contributions and any salary sacrificed contributions (deducted from an employee's before-tax salary). Concessional contributions also include tax-deductible super contributions. Employers can check whether any employees who make additional contributions under salary sacrifice arrangements will exceed the concessional contributions cap. |
Eligible termination payments and genuine redundancy
| 2016/17 | 2017/18 | What this means |
| ETP cap | ||
| $195,000 | $200,000 |
Employment termination payments (lump sum payments made in consequence of a person's termination of employment e.g. notice payments, golden handshakes, invalidity payments, redundancy payments in excess of tax-free components) are generally concessionally taxed when the amounts are below the concessional caps and when the payments are made within 12 months of termination. If the termination is a genuine redundancy, the part of the employee's ETP that is concessionally taxed will be limited by the ETP cap. |
| Whole-of-income cap | ||
| $180,000 | $180,000 | If an employee resigns, the part of the employee's ETP that is concessionally taxed will be limited by the 'whole-of-income cap'. |
| Tax-free limit (base amount) | ||
| $9,936 (plus $4,969 for each completed year of service) | $10,155 (plus $5,078 for each completed year of service) | Any payments that meet the conditions of a genuine redundancy payment are tax free up to the tax-free limit. |
See also our article on the increase in the national minimum wage and modern award minimum wages here.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.
