From 1 July 2023 the Fair Work High Income threshold (FWHIT) has risen to $167,500. This is a rise of $5,500 from last financial year.
The increased FWHIT will impact those employees seeking to become eligible for 186 Employer Nomination Scheme or 494 Skilled Sponsored Employment Regional (Provisional) Visas.
Explaining the FWHIT
The FWHIT is used primarily for employment law purposes and is administered by the Fair Work Commission. In an immigration context the FWHIT is used to determine eligibility for some visas and give access to relaxed requirement for others.
Impact of the FWHIT increase
One of the major uses for the FWHIT is to give high earning employees who are over 45 years old the ability to be nominated by their employer for 494 or 186 visas. The upper age limit on applying for these visas is usually 45 years old at the time of application for the visa. There are some limited exceptions to the age requirement which including where an employee:
- has worked for the same business on 482 visa for 3 years in the same role; AND
- For each of the 3 years earnt at least the FWHIT income threshold.
Older employees are often very invested in ensuring their earning remain at or above the FWHIT for the time they are on a 482 visa. It is only through the FWHIT age exemption that most employees become eligible for permanent residence in Australia.
Definition of earnings
In most cases corporate Australia’s understanding of earnings differs from those that the Department of Home Affairs (DHA) allows to be taken into account when determining if an employee has earned at least the FWHIT in a year. Earnings that can be included towards the FWHIT include:
- wages; and
- any amounts applied or dealt with in any way on the employee’s behalf or as the employee directs; and
- the agreed money value of non-monetary benefits
Amounts that cannot be include are:
- payments the amount of which cannot be determined in advance (e.g. commissions, incentive-based payments and bonuses, and overtime (except guaranteed overtime));
- reimbursements of expenses incurred;
- the nominator’s statutorily required contribution to superannuation.
When conducting yearly reviews we recommend employers keep the increase to FWHIT in mind and, as far as possible, ensure that employees over 45 years old meet the FWHIT threshold this financial year. This will allow the employee to build eligibility towards either a 494 of 186 visa application in the future.
If you are unsure how to frame your employee’s total remuneration package to meet FWHIT or would like an assessment of your employee’s eligibility for permanent residence please contact Nevett Ford Lawyers by phone at 03 9614 7111 or by email at firstname.lastname@example.org.