The ETI wage floor is the wage test that gates the Employment Tax Incentive. To claim ETI for a qualifying employee, the employer must pay at least the applicable minimum wage, and the value of the incentive depends on the wage relative to that floor.
What it means
Which floor applies depends on the employee's situation. Where the National Minimum Wage Act applies, the NMW is the floor. Where a wage-regulating measure such as a sectoral determination or collective agreement applies, that measure is the floor. Where neither applies, a fixed minimum set in the ETI Act stands in. Paying below the applicable floor disqualifies the claim.
Where it fits in
The ETI calculation reads the employee's wage against the correct floor each month to decide both eligibility and the incentive amount, which tapers as the wage rises. The wage floor type - NMW, wage-regulating measure, or the fallback - is part of the employee's ETI setup.
Key rules
- Sets the minimum wage an employee must be paid for an ETI claim.
- The floor is the NMW, a sectoral or collective wage measure, or a fixed fallback.
- Paying below the applicable floor disqualifies the ETI claim.
- The wage relative to the floor also drives the incentive amount.
