Guarantee of annual earnings

In this arrangement, if an employer gives an award-covered employee a written guarantee of annual earnings above the high income threshold and the employee agrees to it, the modern award does not apply to them while the guarantee is in place. This means they are not entitled to award conditions such as overtime rates, penalty rates or other allowances. It's a trade-off where the employee receives a higher base salary in exchange for not receiving these additional award entitlements.

How a guarantee of annual earnings works

Rates current from 1 July 2026.

The high income threshold is $190,100 from 1 July 2026. The guarantee must be in writing, agreed by the employee, and given within 14 days of starting employment or agreeing to new terms. Before or when you give it, you must tell the employee in writing that the award will not apply. It cannot be used if an enterprise agreement applies, and the National Employment Standards still apply. For example, an award-covered manager guaranteed $200,000 a year is not entitled to the award's overtime rates.

See high income threshold and our guide to modern awards.