On 1 July 2019, the Australian government increased both the maximum superannuation contribution base and the high-income threshold.
Maximum superannuation contribution base
Employers are required to make a contribution to the Superannuation Guarantee (SG) equal to 9.5% of employees’ wages up to a quarterly limit. Wages under the quarterly limit are referred to as the maximum superannuation contribution base. Employers are not mandated to contribute to the SG for the part of the employee’s earnings above the maximum superannuation contribution base.
On 1 July, the maximum superannuation contribution base per quarter increased from AUD 54,030 to AUD 55,270. Therefore, the maximum SG contribution per quarter increased from AUD 5,132.85 to AUD 5,250.65, based on an employer’s contribution base of 9.5% of employees’ wages.
The high-income threshold limits an employee’s eligibility to bring an unfair dismissal claim. Employees earning more than the threshold are not allowed to pursue such claims unless they are covered by a modern award or an enterprise agreement. On 1 July 2019, the high-income threshold increased from AUD 145,400 to AUD 148,700. In addition, the maximum compensation payable for a successful unfair dismissal claim increased from AUD 72,700 to AUD 74,350.
To challenge a termination, higher-income earners may always pursue other longer avenues, such as breach of contract or discrimination claims.
Employers should review their contribution rates and dismissal policies and comply accordingly.