Employment law and taxation changes for the 2024/2025 financial year

In accordance with the 2024 annual wage review decision of the Fair Work Commission, all modern award rates of pay will increase by 3.75%. This increase will commence from the first full pay period on, or after, 1 July 2024.

From 1 July 2024, the national minimum wage for adults working full time (38 hours per week) has increased from $882.80 ($23.23 per hour) to $915.90 per week ($24.10 per hour).

The casual loading for award/agreement free employees remains set at 25%, consistent with the standard casual loading in modern awards.

The above changes apply to all workers in the national system including:

• junior employees;
• employees to whom training arrangements apply;
• employees with a disability; and
• to piece rates, through the operation of the methods applying to the calculation of those wages.

It is imperative that all employers conduct an annual review of their remuneration arrangements with their employees to ensure ongoing compliance with minimum wage rates.

For those employers in WA who are outside the national system, effective from 1 July 2024:

• the minimum wage has increased from $863.40 to $918.60 per week; and
• all WA State award rates will increase by 4%.

In the WA private sector this change generally applies to the employees of employers who are not incorporated, such as sole traders and partnerships of individuals.

The high-income threshold for the purposes of the Fair Work Act 2009 (Cth) (FW Act) has, from 1 July 2024, increased from $167,500 to $175,000.

The threshold is relevant for the purposes of:

• protection from unfair dismissal;
• maximum compensation from an unfair dismissal claim; and
• considering whether a modern award applies to an employee if the employee has a guarantee of annual earnings.

Western Australia imposes a separate “maximum salary level” for lodging unfair dismissal and denied contractual benefit claims. From 1 July 2024, the level has increased from $187,800 to $195,700. The current figure may be accessed here.

The Fair Work Ombudsman (FWO) has now published the latest version of:

• Fair Work Information Statement;
• Casual Employment Information Statement; and
• Fixed Term Contract Information Statement.

These can all be access on the FWO website here.

It is a requirement under the FW Act that a national system employer give each employee a copy of these statements that are relevant to their employment before, or as soon as practicable after, the employee starts employment.

Failure to give these statements, or the current version of them, is a breach of the National Employment Standards and the FW Act, attracting liability to a civil penalty.

• The ETP cap for life benefit and death benefit termination payments will increase to $245,000 (up from $235,000 in the 2023/24 income year).
• The amount up to the ETP cap is taxed at a concessional rate (17% or 32% based on whether the taxpayer has reached preservation age) and the amount in excess of the ETP cap is taxed at the highest marginal rate (currently 47%).

• The whole-of-income cap will remain at $180,000 as this is a non-indexed figure.

From 27 February 2024, the maximum civil penalties applicable to breaches of civil penalty provisions of the FW Act increased significantly for non-small business companies, with the remaining to stay at 1 July 2023 rates. The current civil penalty rates (per contravention) are:

• for corporate contraveners – $93,900 for a company with less than 15 employees (small business), and $469,500 for other companies; and
• for individual contraveners – $18,780.

Contraventions prior the relevant commencement date will attract the penalties applicable when they occurred.

Civil penalty provisions within the FW Act include those relating to:

• compliance with the National Employment Standards, modern awards and enterprise agreements, including wage underpayments;
• protection of workplace rights (e.g. General Protections) and other employee protections;
• rights of entry, and
• industrial action.

• The new base limit for the 2024/25 income year will be $12,524 and the amount for each completed year of service will be $6,264.
• This is an increase from the 2023/24 base amount of $11,985 and $5,994 for each completed year of service.

These include the right to:

• represent eligible employees in workplace consultation, disputes, disciplinary process, enterprise bargaining and any award/enterprise bargaining processes where the employee is entitled to be represented;
• reasonable communication with eligible employees during working hours or work breaks or before or after work;
• access to workplace facilities, including a room fit for purpose (private/accessible), a physical or electronic notice board, electronic means to communicate, secure document storage area and office facilities (including scanner, printer, and photocopier). These do not need to be provided if the workplace does not have access to such facilities after taking reasonable steps or if impractical at the time/manner sought due to operational requirements; and
• five days paid leave to undertake induction type training, and at least one day per subsequent year, for one delegate per 50 employees.

Eligible employees means employees who are union members or eligible to be members. The clause to be inserted can be found here.

• The superannuation guarantee percentage increases to 11.5% from 1 July 2024 (up from 11.0 % in the 2023/24 income year).
• All employers are obliged to make minimum superannuation contributions on behalf of their employees every quarter, calculated by multiplying each employee’s ordinary time earnings for a quarter by the superannuation guarantee percentage.

• The maximum contribution base will increase to $62,980 per quarter or $251,920 per year (up from $62,270 per quarter in the 2023/24 income year).
• An employer is not required to provide superannuation support for its employees on any part of their quarterly earnings exceeding this limit, however, may have a contractual obligation to make additional contributions.

• The concessional contributions cap applies to limit the amount of contributions which are taxed at the concessional superannuation rate of 15%.
• Where the concessional contributions cap is exceeded, any excess concessional contributions amount must be included in a taxpayer’s assessable income and tax paid at their marginal tax rates.
• Payments towards the concessional contributions cap include payments made by an employer (including contributions made under salary sacrifice arrangements) or personal contributions claimed as a tax deduction.
• The concessional contribution cap for the 2024/25 year has increased to $30,000, from $27,500 since 2021/22.

• The non-concessional contributions cap (which is set at 4 times the concessional cap) will increase from $110,000 to $120,000 for 2024/25 (or $360,000 under the bring-forward rule over 3 years, subject to the other eligibility requirements).
• The total superannuation balance threshold for making non-concessional contributions will remain at $1.9m for 2024/25.

The Government's revised Stage 3 tax changes (as announced on 25 January 2024 and enacted into law by the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024) commenced from 1 July 2024.

Basically:

• the 19% tax rate has been reduced to 16%;
• the 32.5% tax rate has been reduced to 30%;
• the 37% tax rate threshold has been increased from $120,000 to $135,000; and
• the 45% tax rate threshold has been increased from $180,000 to $190,000.