High Income Threshold Rose to $190,100

The Fair Work Commission puts the first job in one sentence: the high income threshold operates as a limit to an employee’s eligibility to be protected from unfair dismissal under the terms of the Fair Work Act. It then sets the condition precisely. If an employee is not covered by a modern award, and an enterprise agreement does not apply to them, they must have earnings of less than the threshold. Where an award does cover the employee, that earnings test is not the gate.

The second job is award coverage, and it runs through a separate instrument called a guarantee of annual earnings. The threshold is the level that guarantee has to exceed. Without the guarantee, the number on its own does nothing to the award.

Two figures move with it on the same date. The contractor high income threshold, now $190,100, is defined by the Fair Work Ombudsman as the amount a contractor earns before certain Commission remedies stop applying, including for unfair deactivation, unfair termination and unfair contract terms, and above which a contractor can choose not to use the whole of relationship test. The compensation cap, now $95,050, is the most the Commission can order an employer to pay in an unfair dismissal case.

The test is not the number on the contract. The Fair Work Commission includes wages, amounts dealt with on the employee’s behalf or as the employee directs, and the agreed money value of non-monetary benefits, where a reasonable money value has been agreed by both parties for something received in return for working.

Excluded, on the Commission’s own list:

• payments that cannot be determined in advance, such as commissions, incentive-based payments and bonuses
• overtime, other than guaranteed overtime
• reimbursements, such as per diem payments
• compulsory superannuation contributions, currently 12% under the superannuation guarantee

That last exclusion catches people out. A package advertised at a figure above the threshold with compulsory super folded into it can sit below the threshold once the super is stripped out, and a base salary below it can rise above once the agreed money value of a vehicle or similar benefit is added. Whether a particular package crosses the line is a question about that package, and this page will not answer it.

Nothing in the income tax system changes at $190,100. No bracket starts there, the Medicare levy does not step there, and the superannuation guarantee rate does not move there. The threshold is set under the Fair Work Act and the Fair Work Regulations, and the only things it governs are the ones above.

The two get confused because both are annual dollar figures that change on 1 July. If what you want is the tax position on a salary near this level, that is a different calculation, and the rates behind it are listed with their sources on Methodology. The Wage Calculator will work out take-home pay on any figure you enter.

Whether your own earnings cross the threshold, because that depends on agreed money values and on which payments can be determined in advance, and neither is visible from a salary figure. Whether a guarantee you have been given is validly made, which turns on the timing and the written notice. And whether a dismissal was unfair, which the threshold only gates rather than decides.

One disclosure about sourcing. The Fair Work Ombudsman library article on guarantees of annual earnings publishes no last-updated date, only its reference number K600535, so the date recorded against it below is our retrieval date alone. The threshold and cap figures come from two pages that do carry dates, and both are recorded there. General information is not legal advice, and the limits on what this site can tell you are set out on Disclaimer.