Foreign nationals wishing to apply for Australian permanent residence under visa subclass 186 (Employer Nomination Scheme) ordinarily has an upper age limit of 45 years, meaning that once an applicant turns 45 years of age, they will need an ‘age exemption’ to be eligible.
The Fair Work Commission has released its annual increase to the high income threshold. From an Australian immigration perspective, this threshold affects the salary benchmark that applicants aged over 45 years must now meet. If your business is currently contemplating sponsoring an overseas national for permanent residence and they are 45 years of age or over, you must ensure that they have met the high income threshold for the previous 2 years before lodgement of the application to meet the ‘age exemption’ criteria.
Annual indexation.
As the FWHIT is indexed each year effective 1 July, a specific threshold would apply to the period from 1 July of a particular year to 30 June of the next year, that is, the period representing the tax (or fiscal) year. Since the 2022-23 financial year, the FWHIT has been as follows:
- 2022-2023: AUD 162,000
- 2023-2024: AUD 167,500
- 2024-2025: AUD 175,000
- 2025-2026: AUD 183,100
What is the Fair Work High Income Threshold (FWHIT) ?
The high income threshold operates as a limit to an employee’s eligibility to be protected from unfair dismissal under the terms of the Fair Work Act.
The high income threshold is currently $183,100. This figure is adjusted annually on 1 July.
For a visa application lodged before 30 June 2025, the high income threshold was $175,000.
What are ‘earnings’ ?
See Fair Work Act s.332
Earnings include:
- wages
- such other amounts (if any) worked out in accordance with the Regulations
- amounts dealt with on the employee’s behalf or as the employee directs, and
- the agreed money value of non-monetary benefits.
Non-monetary benefits are benefits other than an entitlement to a payment of money:
- to which the employee is entitled in return for working, and
- for which a reasonable money value has been agreed by the employee and the employer.
The Fair Work Commission has a discretion to include a benefit that is not a payment of money and that is not a ‘non-monetary benefit’ (within the meaning of s.332(3) of the Fair Work Act). It may do so where it is satisfied that it is appropriate to take it into account, and it can attribute a ‘real or notional’ value to the benefit, in default of any agreement between the parties.
Earnings do not include:
- payments the amount of which cannot be determined in advance such as:
- commissions
- incentive-based payments and bonuses, or
- overtime (except guaranteed overtime);
- reimbursements (such as per diem payments), and
- compulsory contributions to a superannuation fund (superannuation guarantee).
Per diem means ‘by the day’ – a sum of money paid to an employee every day, such as a meal allowance or accommodation allowance.
Superannuation
Compulsory superannuation contributions are not included in the calculation of an employee’s earnings. Any superannuation paid in excess of compulsory contributions may be included in the calculations of the employee’s earnings.
