Minimum Wage Increase and other Super Changes – 1 July 2022
Minimum Wage Increase
As of 1 July 2022, the National Minimum Wage increased by $40 per week (or 5.2%) to $812.60 per week or $21.38 per hour.
Award minimum wages increased by 4.6%, with a minimum increase of $40 per week for adult award classifications and based on a 38-hour week for a full-time employee. This means that minimum award wages above $869.60 per week receive a 4.6% increase, while those below that amount receive a $40 increase.
The Superannuation Guarantee Contributions Rate increased from 10% to 10.5%.
The $450 super guarantee threshold has been removed to extend super guarantees to eligible employees irrespective of their monthly pay. Workers under 18 only need to be paid super when they work more than 30 hours a week.
The eligibility age for downsizer contributions has been lowered, allowing eligible people aged 60 years and over to contribute up to $300,000 per person or $600,000 per couple into their superannuation account from the proceeds of selling their home.
From 1 July 2022 the maximum quarterly contribution base increased from $58,920 to $60,220; and the maximum annual contribution base increased from $235,680 to $240,880.
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.
Company and Business Name Fees
ASIC has increased company and business name fees from 1 July 2022, find more details here.
Fair Work Commission Filing Fees
Filing fees for applications for unfair dismissal, general protections and anti-bullying have increased from $74.90 to $77.80.
Unfair Dismissal High Income Threshold
From 1 July 2022, the High Income Threshold increased from $158,500 to $162,000.
Employees earning more than $162,000 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:
- Money paid on behalf of the employee (e.g. salary sacrifice); and
- The agreed monetary value of non-monetary benefits (e.g. company car or mobile phone).
The High Income Threshold calculation does not include:
- Payments which cannot be determined in advance (e.g. commissions, incentive-based payments and bonuses);
- Overtime (unless the overtime is guaranteed); and
Unfair Dismissal Compensation Cap
The maximum compensation for unfair dismissal applications is the lesser of 6 months pay or the equivalent of half the Unfair Dismissal High Income Threshold. It has increased from $79,250 to $81,000.
Redundancy – Tax Free Amount
The Tax Free Amount for genuine redundancy payments is indexed annually. From 1 July 2022 the TFA increased from $11,341 to $11,591.
The additional amount per completed year of service increased from $5,672 to $5,797.
Employment Termination Payments (ETP)
The cap for the lower tax rate on ETPs has increased from $225,000 to $230,000 for the 2022-23 income year.
Civil Penalties for Breaches of the Fair Work Act
Until 30 June 2023, the civil penalty unit for single breaches of the Fair Work Act will remain at $222.
The maximum penalty is, for:
- a company: $66,600.00 for a non-serious contravention, $666,000 for a serious contravention.
- an individual: $13,320.00 for a non-serious contravention, $133,200.00 for a serious contravention.
Multiple breaches can result in multiple penalties being imposed.
Fair Work Information Statement
From 1 July 2022 this updated Fair Work Information Statement must be provided to all new employees.
Contact Peter McNamara today for your workplace law advice.