The high income threshold is an annual rate of earnings affecting eligibility for unfair dismissal protection for non-award employees.
Legislation: Fair Work Act 2009 ss 332, 333, 382, 392 | Category: Employment Law
What is High Income Threshold?
The high income threshold is an earnings amount set each year under the Fair Work Regulations that affects eligibility for certain protections. It is most commonly relevant to unfair dismissal eligibility, where employees earning at or above the threshold and not covered by an award or enterprise agreement cannot make an unfair dismissal claim.
The threshold is indexed annually on 1 July. From 1 July 2026 the high income threshold is $190,100 per annum, up from $183,100. The calculation includes wages, salary sacrificed amounts, and the agreed money value of non-monetary benefits such as a fully maintained car. It excludes reimbursements, compulsory employer superannuation, and any payment whose amount cannot be worked out in advance, which rules out commissions, overtime and discretionary bonuses.
Key Compliance Points for Employers
- The test is the employee’s annual rate of earnings at the time of dismissal, not the amount actually paid over the previous year
- Employees covered by an award or enterprise agreement can claim unfair dismissal regardless of earnings, so check the coverage clause before relying on salary alone
- High income employees remain entitled to the NES, general protections, discrimination and unlawful termination claims
- A guarantee of annual earnings under s330 stops a modern award applying while it is in force, but it must be in writing and agreed before the guaranteed period starts
- The threshold also caps unfair dismissal compensation at the lesser of 26 weeks’ pay or half the threshold, being $95,050 from 1 July 2026
Frequently Asked Questions
What is High Income Threshold?
The high income threshold is an annual rate of earnings affecting eligibility for unfair dismissal protection for non-award employees. It is $190,100 from 1 July 2026 to 30 June 2027. The figure that applies is the one in force on the day the dismissal took effect, not the day the claim is filed.
Why is High Income Threshold important for employers?
It decides whether an unfair dismissal claim can be run at all, and it caps what the Fair Work Commission can order in compensation. Employers most often get caught out by assuming a senior title or a high salary means an employee is award-free. Award coverage is decided by the work performed against the award’s coverage and classification clauses, so a well-paid employee can still be covered and can still claim.
