The High Income Threshold (HIT), adjusted each financial year, currently sits at $158,500.
Employees who are not covered by an award or enterprise agreement will be protected from unfair dismissal if their income is less than the HIT.
The higher an employee’s income, the more likely that they’ll have access to other benefits, such as personal use of a car or phone and health insurance which can tip them over the HIT threshold.
A recent Fair Work Commission decision highlights how significantly an employee’s personal use of a work vehicle can bolster their earnings.
The almost exclusive personal use of a vehicle for 100km per day over a 40 day period was found to increase the employee’s annual earnings from $125,000 to $176,000.
This resulted in the employee’s earnings exceeding the HIT and their unfair dismissal application being thrown out.
Key Take Away
Where an employee is provided with non-monetary benefits, such as the personal use of a vehicle, avoid later disputes by expressly agreeing the monetary value of the benefits in the employment contract. In our experience agreement is almost always achieved at the commencement of the employment relationship.
Where values have not been attributed to benefits by agreement the employee’s use of benefits should be regularly audited to ensure they are not receiving a greater value from the benefit than accounted for.
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