Financial adjustments employers need to know about from 1 July 2023
As always, the new financial year brings financial adjustments to key employment, superannuation and tax obligations and thresholds.
Key changes and increases for the 2023/2024 financial year, effective from 1 July 2023, are as follows:
Minimum wage: The national minimum wage will increase to $23.23 per hour (up from $21.38 per hour for the 2022/2023 financial year) and $882.80 per week (up from $812.60 per week for the 2022/2023 financial year) based on a work week of 38 ordinary hours.
The national minimum wage applies to all award or enterprise agreement free employees with the exception of junior employees, employees to whom a training arrangement applies and some employees with a disability (to whom different minimum wage rates will apply).
Award minimum wages: Award minimum wages will increase by 5.75 per cent.
High income threshold: The high-income threshold will increase to $167,500 (up from $162,000 for the 2022/2023 financial year).
Queensland employers welcomed that government’s decision to provide payroll tax relief for small-and-medium enterprises.
Compensation cap: The maximum compensation cap for unfair dismissal claims will increase to $83,750 (up from $81,000 for the 2022/2023 financial year).
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Superannuation: The minimum superannuation guarantee percentage will increase to 11 per cent of an employee’s ordinary time earnings (up from the 2022/2023 contribution rate of 10.5 per cent).
The maximum superannuation contribution base on which contributions must be calculated will increase to $62,270 per quarter, meaning that the maximum superannuation guarantee contribution amount will increase to $27,398.80 per year.
The superannuation concessional contribution cap (above which contributions are taxed at marginal rates) for the 2022/2023 financial year is staying at $27,500.
Australian Government Parental Leave pay scheme: The current entitlement of 18 weeks’ parental leave pay will be combined with the current partner pay entitlement of two weeks’ parental leave pay.
Partnered parents will be able to claim 20 weeks’ (or 100 days’) parental leave pay between them, with single parents able to access the full 20 weeks’ (or 100 days’) parental leave pay on their own.
Research in 2016 found that about one-third of Australian workers were not being paid some or all of their superannuation.
Redundancy payments: The base limit for the tax-free component of genuine redundancy payments will increase to $11,985 (up from $11,591 for the 2022/2023 financial year) with an additional $5,994 tax free for each year of service (up from $5,797 for the 2022/2023 financial year).
Melinda Bell is an employment and labour lawyer and Jessica Alesci-Pettitt is a lawyer, both at Norton Rose Fulbright in Melbourne.