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HR Advice Online: What’s MITA?

What is MITA – Minimum Income Threshold Amount?

Under the Real Estate Industry Award 2020 (the Award), if you engage an employee on a commission-only basis you need to ensure the employee meets the:

• commission only qualifying criteria; and
• minimum income threshold amount (MITA) qualification criteria.

What are the Commission Only qualifying criteria?

Under the Award, a person may only enter into an agreement to be a commission only employee when all of the following conditions have been satisfied:

• the employee and the employer have made a written agreement as provided in clause 17 (of the Award) that the employee will be remunerated on a commission only basis, setting out the basis upon which the entitlement to commission will be calculated as provide in clause 17 (of the Award);
• the employee has been issued with a real estate agent’s license or is registered or permitted to perform the duties of a real estate salesperson under real estate law;
• the employee has been engaged in property sales or commercial, industrial or retail leasing as a Real Estate Employee Level 2 or (with any licensed real estate agent) or was an active licensed real estate agent for at least 12 consecutive months in the 3 years immediately prior to entering into a commission-only agreement;
• the employee is at least 21 years of age;
• the employee is not engaged as a casual, a junior, a Real Estate Employee Level 1 or a trainee; and
• for an employee employed on a commission only basis after 2 April 2018 the employee can establish (with the present or any past employer) that he or she has achieved the Minimum Income Threshold Amount (MITA) prescribed by the Award (as may be amended from time to time). Provided that the MITA will not have to be achieved in circumstances where the employee has operated his or her own real estate business within the last 3 years.

What is the MITA criteria?

A commission only employee is required to receive a minimum of 31.5% of the gross employer commissions. The Award does not provide for any deduction to be made from commission payments (this includes for any advertising costs etc).

What is the annual MITA review?

Employers need to re-assess the performance of a commission only employee at the end of each 12 months of employment to determine if the commission only arrangement can continue.

The Award requires the gross income of a commission only employee to be reviewed annually. The review is mandatory and the employer must ensure the review is undertaken.

If the review confirms the gross income of the commission only employee for the year under review was less than the MITA, the employee is not permitted to continue being employed on a commission only basis.

When do I have to do the MITA review?

By 1 April each year, employers need to calculate all commission employee earnings and if they have not earned at least 125% of the Level 2 (Representative) rate or relevant classification level of the award, the employee MUST come off commission only employment and be put on salary.

NOTE: An employee who qualified to be employed on a commission only basis under this Award prior to 2 April 2018 will continue to be eligible for commission only employment under the terms of this Award, as long as the employment with that employer continues, and will still be required to meet the MITA.

For assistance with understanding if your commission only arrangements are compliant or for more information around commission-only and MITA, you can view or Real Estate Industry Guide on our website or please contact us at advice@hradviceonline.com.au or 1300 720 004.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors, such as government legislation changes, may not be up to date at the time of reading. It is not legal advice and should not be treated as such.