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 2020 from $148,700 to $153,600 for dismissals.

It is important for employees to remember that even if you earn over the high-income threshold of $153,600 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 2020 from $74,350 to $76,800.

Employment Termination Payment cap

The Employment Termination Payment cap threshold will increase to $215,000 from 1 July 2020. 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:

  1. The base amount applicable to all employees; and
  2. An amount which is multiplied on length of years completed with employer:
Year Base Amount Service (x years)
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