The 3% increase to the Federal Minimum Wage wasn’t the only change coming into effect from 1 July this year. The new rate is payable from the first full pay cycle starting in July. However, businesses will also need to be aware also of the following changes:
- The Modern Awards Wage increase has also risen by 3% – check that you have updated pay rates for employees who are being paid award rates. Even if they are currently paid above award, check that the new rate is not less than the rate being paid.
- The high-income threshold increased to $148,900 – allows the employee and the employer to enter into a guarantee of annual earnings which can end many if not all of the provisions of a minimum award applying to the employee.
- Unfair dismissal compensation limit raised to $74,450 – the limit payable if an unfair dismal claim succeeds.
- Tax free threshold for “genuine redundancy” raised to the first $10,638 then $5,320 for each year of completed service. Employers are advised to carefully consider whether the circumstances of any redundancy satisfy the relevant ATO requirements prior to utilising the tax-free thresholds.
- Superannuation maximum required contribution rate is increased to $55,620 per quarter. However, the maximum concessional contributions (all employees, regardless of age) remains at $25,000 annually.
- Single Touch Payroll (STP) for businesses with 19 or less employees – started for larger employers in 2018 with 2019 as the year when all smaller entities are required to have completed the transition to STP. Employers can access more information here.
It’s important to note these changes as you enter into the new financial year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.