Minimum Wage Increase and other Super Changes – 1 July 2023
Each year, the government changes its fees and charges, and statutory thresholds and caps, effective with the start of the new financial year. For example, ASIC has increased company and business name fees from 1 July 2023 – you can find more details here.
One of the most significant changes is to employee related entitlements that became effective on 1 July 2023.
Minimum Wage Increase
As of 1 July 2023, the National Minimum Wage increased by $70.20 per week (or 8.6%) to $882.80 per week or $23.23 per hour.
Award minimum wages increased by 5.75%, based on a 38-hour week for a full-time employee.
Superannuation
From 1 July 2023, the Superannuation Guarantee Contributions Rate increased from 10.5% to 11%.
From 1 July 2023, the maximum quarterly contribution base increased from $60,220 to $62,270; and the maximum annual contribution base increased from $240,880 to $249,080.
The maximum contribution bases are the maximum salary amounts for which an employer must contribute superannuation guarantee amounts, unless the employer has agreed to pay superannuation contributions on the total salary paid.
Fair Work Commission Filing Fees
From 1 July 2023, filing fees for applications for unfair dismissal, general protections and anti-bullying increased from $77.80 to $83.30.[i]
Unfair Dismissal High Income Threshold – Unfair Dismissal Limits and Caps
From 1 July 2023, the High Income Threshold increased from $162,000 to $167,500.[ii]
Employees earning more than $167,500 cannot make unfair dismissal claims unless they are covered by a modern award or an enterprise agreement.
The following are included in the High Income Threshold calculation:
- Wages;
- Superannuation;
- Money paid on behalf of the employee (salary sacrifice amounts); and
- The agreed monetary value of non-monetary benefits (company car or mobile phone benefits).
The High Income Threshold calculation does not include:
- Payments which cannot be determined in advance (commissions, incentive-based payments and bonuses);
- Overtime (unless the overtime is guaranteed); and
- Reimbursements
Unfair Dismissal Compensation Cap
The maximum compensation for unfair dismissal applications is the lesser of 6 months pay or half the Unfair Dismissal High Income Threshold, so the cap has increased from $81,000 to $83,750.
Redundancy – Tax Free Amount
The Tax Free Amount for genuine redundancy payments is indexed annually. From 1 July 2023 the TFA increased from $11,591 to $11,985.
The additional amount per completed year of service increased from $5,797 to $5,994.
Employment Termination Payments (ETP)
The cap for the lower tax rate on ETPs has increased from $230,000 to $235,000 for the 2023-24 income year.
Civil Penalties for Breaches of the Fair Work Act
From 1 July 2023, the civil penalty unit for single breaches of the Fair Work Act increased to $313. [iii]
From 27 February 2024 penalties for non-small business employers increased.
The maximum penalty is, for:
- a company with more than 15 employees: $469,500 for a non-serious contravention, $4,695,000 for a serious contravention;
- a company with less than 15 employees: $93,900 for a non-serious contravention, $939,000 for a serious contravention;
- an individual: $18,780 for a non-serious contravention, $187,800 for a serious contravention.
Multiple breaches can result in multiple penalties being imposed.
Contact Peter McNamara on 9299 2223 and [email protected] for advice about your workplace law compliance.
Parental Leave
From 1 July 2023 paid parental leave has been combined into 20 weeks of paid leave that can be shared between parents (rather than 18 weeks parental plus 2 weeks of father/partner pay) and there is a new family income limit of $350,000 (where one parent does not meet the individual $156,647 test).
If you have any employment law issues then contact Peter McNamara today for your workplace law advice.
[i] based on the index in reg 3.02 of the Fair Work Regulations 2009 (Cth))
[ii] (based on the index in reg 2.13 of the Fair Work Regulations 2009 (Cth).
[iii] based on the index per s 4AA(3) Crimes Act 1914 (Cth)