A recent Fair Work Commission decision has highlighted an issue that is often overlooked by employers when assessing whether an employee is protected from unfair dismissal. The high income threshold is not determined solely by an employee’s base salary.

In Khalif v Amazon Web Services Australia Pty Ltd [2026] FWC 2187, the Fair Work Commission found that an employee’s annual rate of earnings exceeded the high income threshold of $183,100 that applied at the time of dismissal. As a result, the employee was not protected from unfair dismissal and his application was dismissed.

The High Income Threshold

Employees who are not covered by a modern award or enterprise agreement must generally earn less than the applicable high income threshold in order to pursue an unfair dismissal claim. Determining whether an employee exceeds that threshold can be more complicated than simply reviewing their annual salary.

What Was Included in the Calculation?

The Commission accepted that the employee’s annual rate of earnings totalled $185,782.83 and included the following components:

• Base salary of $150,000 per annum.
• A contractual signing bonus of $30,000 per annum paid in monthly instalments.
• Personal commuter benefits valued at $4,645 per annum.
• Group Term Life Insurance premiums of $526.95 per annum paid by the employer.
• Group Salary Continuance Insurance premiums of $610.88 per annum paid by the employer.

Why the Insurance Premiums Matter

One of the most interesting aspects of the decision was the Commission’s treatment of employer-funded insurance benefits. The Commission found that both the life insurance premiums and salary continuance insurance premiums paid by the employer constituted amounts applied or dealt with on the employee’s behalf and therefore formed part of the employee’s earnings.

Although the annual premiums were relatively modest, they contributed to the employee’s overall annual rate of earnings and helped push the total remuneration package above the high income threshold.

The Signing Bonus Was Also Included

The Commission also confirmed that a guaranteed signing bonus can form part of an employee’s annual rate of earnings where it is a contractual entitlement that can be determined in advance. In this case, the bonus was not discretionary, was not linked to performance and was payable provided the employee remained employed.

Lessons for Employers

This decision serves as a useful reminder that employers should review an employee’s entire remuneration package when considering whether the high income threshold applies.

• Do not focus solely on base salary.
• Consider guaranteed bonuses and allowances.
• Review employer-funded insurance arrangements such as life insurance and income protection or salary continuance insurance.
• Assess personal benefits provided to employees that may have a measurable value.
• Keep clear records of all remuneration components when assessing unfair dismissal eligibility.

How Winter Workplace Consulting Can Help

Determining whether an employee falls above or below the high income threshold is not always straightforward. We regularly assist employers with unfair dismissal matters, jurisdictional objections, employment contracts, remuneration structures and workplace disputes. If you would like advice on an employee’s entitlement to bring an unfair dismissal claim or assistance managing a termination process, please contact Winter Workplace Consulting.