It’s that time of year again!
With the new coming financial year comes an increase to the high income threshold for unfair dismissal claims, maximum compensation for an unfair dismissal and employment termination payments.
High income threshold
The high-income threshold for employee’s seeking to pursue an unfair dismissal claim (unless award or agreement covered) will increase from 1 July 2024 from $167,500 to $175,000 for dismissals.
It is important for employees to remember that even if you earn over the high-income threshold of $167,500 there are other avenues available to employees to challenge a dismissal, including the general protections provisions, anti-discrimination legislation and the common law.
Maximum compensation
The maximum compensation which can be awarded by the Fair Work Commission for an unfair dismissal is capped at 6 months’ pay (at half of the high-income threshold) and will also rise from 1 July 2024 to $87,500.
Employment Termination Payment cap
The Employment Termination Payment cap threshold will increase to $245,000 from 1 July 2024. The whole of income cap remains at $180,000 as this is a non-indexed figure.
The tax-free threshold is calculated according to a formula which specifies:
- The base amount applicable to all employees; and
- An amount which is multiplied on length of years completed with employer:
| Year | Base Amount | Service (x years) |
| 2024 – 2025 | $12,524 | $6,264 |
| 2023 – 2024 | $11,985 | $5,994 |
| 2022 – 2023 | $11,591 | $5,797 |
| 2021 – 2022 | $11,341 | $5,672 |
| 2020 – 2021 | $10,989 | $5,496 |
| 2019 – 2020 | $10,638 | $5,320 |
Stay up-to-date
If you need further information about the impact of these increases, or an analysis of a potential claim you may have against your employer, please contact us on (02) 9199 8597 for a no-obligation chat. If you would rather get in contact through email, send your question through to wehelp@jfmlaw.com.au.
The information contained in this post is current at the date of editing – 1 July 2024.