Minimum wage and modern award minimum entitlements
As part of the 2024/2025 Annual Wage Review, the Fair Work Commission Expert Panel approved a 3.5% increase to the national minimum wage and to all modern award minimum wage rates. This brings the national adult minimum wage to AUD 24.95 per hour or AUD 948 per week for 38 hours of work.
The Fair Work Commission has updated modern awards with adjusted wages and minimum entitlements including increases to allowances and other rates. These updated modern awards can be found here.
Note to consider
If annualised salaries are paid to employees, check that these are still sufficient to compensate employees for their award entitlements, and that no revisions are required to "outer limit" hours or other amounts which are intended to be absorbed into the salary.
Superannuation
The superannuation guarantee is also increasing from 11.5% to 12%, being the final scheduled increase following yearly incremental 0.5% increases since 1 July 2021.
Meanwhile, the maximum contribution base (which is the maximum income per quarter for superannuation guarantee purposes) is decreasing from AUD 65,070 to AUD 62,500. This means that the maximum superannuation guarantee payment amount per quarter is AUD 7,500.
High income threshold and unfair dismissal compensation cap
The high-income threshold (relevant for unfair dismissal eligibility and guarantee of annual earnings) and the contractor high income threshold are both increasing from AUD 175,000 to AUD 183,100.
The maximum amount of compensation that can be awarded by the Fair Work Commission to an employee in an unfair dismissal case has increased to AUD 91,550, being half the high-income threshold amount.
Note to consider
Consider whether you should increase the pay of any of your employees or contractors above the high-income threshold noting:
- For employees, this will avoid exposure to unfair dismissal claims for non-award covered employees.
- For fixed term employees, this will avoid the two year and two times renewal cap that otherwise applies.
- For contractors, this will avoid exposure to the unfair contract term remedies.
Paid government parental leave
The amount of Government Parental Leave available to families will increase from the current 22 weeks to 24 weeks, for children born or adopted from 1 July 2025, paid at the national minimum wage. A further increase to 26 weeks is due 1 July 2026.
The Federal Government will also start paying 12% superannuation on Government Paid Parental Leave Pay from 1 July 2025.
Of the available leave, 20 days (an increase from 10 days) can, from 1 July, be taken at the same time as a person's partner, and 20 days (an increase from 15 days) are reserved exclusively for the partner.
Note to consider
Existing parental leave policies may need to be reviewed and updated.
For any further details or for assistance in reviewing your remuneration arrangements, please reach out to the team.
