Increase to High Income Threshold

The Fair Work Commission has released the annual increase to the high income threshold for unfair dismissal claims.

For workers who are not covered by a Modern Award or Enterprise Agreement, their access to protection from unfair dismissal is dependent on their annual earnings being less than the high income threshold. The threshold also impacts the maximum amount of compensation payable for successful unfair dismissal applications.

Effective from 1 July 2021, the high income threshold for unfair dismissal cases will increase to $158,500, while compensation will be capped at $79,250. For dismissals which occurred prior to 1 July 2021, the 2020 threshold of $153,600 (with a compensation cap of $76,800) will still apply.

Employers should note that “annual earnings” includes wages paid, but it may also include other benefits like vehicle allowances, superannuation in excess of compulsory contributions, or the value of non-monetary benefits.

EMA Legal can assist employers with their understanding of when to apply the high income threshold in potential unfair dismissal claims.