What is the high-income threshold?


The high-income threshold is an amount that is indexed each year that limits eligibility to make an unfair dismissal application. The current high-income threshold is $162,000. If an employee earns more than this amount per annum, they may not be eligible to make an unfair dismissal application.


What is included in the high-income threshold?

The high-income threshold includes, among other things, ordinary wages and the agreed money value of non-monetary benefits. This can include guaranteed overtime, the value of the personal use of a company motor vehicle and even the value of the personal use of a company telephone or laptop.

However, payments that are conditional in nature or cannot be determined in advance, usually won’t be included in the threshold. For example, commissions, bonuses and unplanned overtime are considered earnings and therefore are not included in the high-income threshold. Similarly, compulsory superannuation contributions and reimbursement of expenses incurred in the course of employment are not included.


Are there exceptions to the high-income threshold?

If your employment is covered by a modern award or an enterprise agreement, you may still be eligible to make an unfair dismissal application. Unfortunately, senior positions that attract high remuneration are excluded from many awards and enterprise agreements however this is not always the case in particular professions.

Each modern award and enterprise agreement will usually contain a coverage clause, along with a classification structure, which sets out who is covered by the instrument. Modern award and enterprise agreement coverage can be a particularly complex area of law, especially when the issue is not dealt with expressly in the terms of the employment contract. Accordingly, legal advice should always be sought if in doubt.


What do I do if my earnings exceed the high-income threshold?

If you earn more than the high-income threshold and your employment is not covered by a modern award or enterprise agreement, you won’t be able to make an unfair dismissal application. However, there may be other avenues available to you to challenge a dismissal, including a general protections application, which is not subject to any high-income threshold.

As always, it is best to obtain legal advice in respect of any dismissal. A lawyer will be able to provide you with advice about whether you exceed the threshold, whether any exceptions apply and whether there is an alternate application you can pursue. Contact us today to see how we can assist.


Disclaimer: This article should not be construed as legal advice and is not intended as such. If readers wish to obtain advice about anything contained in this article, they should speak with a lawyer and discuss their individual circumstances.