If your employer wants to sponsor you for a 186 or 187 visa, your employer needs to demonstrate that your terms and conditions of employment are no less favourable than the terms and conditions which an ‘equivalent Australian’ employee is or would be receiving. This includes showing that you are paid a salary that is at least equal to the Australian market salary rate for your role.
Salary Requirement – 186 & 187 visa
As part of the application, your employer will need to disclose your salary, or ‘Guaranteed Annual Earnings’. Only certain types of payments can be included in the ‘Guaranteed Annual Earnings’:
- Your base wage
- Any payments which are applied or dealt with on your behalf or at your direction (e.g. your accommodation or housing allowance which your employer covers and pays directly to the landlord)
- The agreed monetary value of non-monetary benefits (e.g. health insurance, car, mobile phone and laptop etc.)
The following cannot be counted towards GAE:
- Any payments or allowances which cannot be determined in advance such as commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed)
- Compulsory superannuation contributions. Guaranteed contributions to superannuation that exceeds the contribution that is required under legislation can be counted towards GAE
Demonstrating the Australian Market Salary Rate
Your sponsoring employer needs to demonstrate that the terms and conditions of your employment are no less favourable than the terms and conditions of employment for an equivalent Australian citizen or permanent resident.
If your employer already has an Australian citizen or permanent resident that is working in the same location and role as the nominated occupation (i.e. the role sponsored for the 186 or 187 visa), then your terms and conditions of employment need to be at least as favourable as this equivalent Australian citizen or permanent resident.
This can be shown by providing a copy of the contract of an Australian citizen or permanent resident that is working in the same position and location as your nominated role.
Your employer can remove all forms of personal identification from the equivalent Australian’s contract. If this contract is a bit old and the equivalent Australian’s salary has increased since the contract was issued, then your employer should include a statement which confirms the current salary.
You must be paid a GAE that is at least equivalent to the Australian employee’s salary.
Because the Department needs to compare ‘apples with apples’, there are also components of the equivalent Australian’s salary which need to be excluded. Since your employer can’t count bonuses, compulsory superannuation and payments which can’t be determined in advance in calculating your GAE, these types of payments can also be excluded from the equivalent Australian’s salary. Once your employer has excluded these types of payments, it can determine the minimum GAE that you must be paid.
Beyond looking at just the salary, the Department will also compare the equivalent Australian’s terms and conditions of employment and assess whether your terms and conditions are at least as favourable. This includes looking at various aspects of the employment contract such as the number of hours of work required, leave entitlements etc.
Relevant Industrial Award
Your nominated occupation may be governed by a relevant industrial award which will specific the salary that you should be paid. For example, a registered nurse working in Victoria will have his or her terms and conditions of employment governed by the Nurses Award 2010, including the salary that he or she should be paid.
You can be paid a salary higher than the level specified in the relevant award.
What if the nominating employer doesn’t have an equivalent Australian working for them?
Your employer can provide evidence of what the Australian market salary rate is for your nominated role and show that your GAE is at least equal to the market rate. This is generally demonstrated by providing Australian market salary survey data. This data needs to be relevant to the nominated role and the location where you will be working (i.e. market salary data, such as Hays Salary Guides, will usually give specific data for various capital cities around Australia).
Market salary data
So here some of the online resources that you use for finding market data:
Now the data usually provides you with a range for the Australian market salary rate for a particular role (e.g. $70,000 to $85,000 per annum). If your GAE falls within this range, or is above it, then the market rate requirement is generally met. If your GAE is at the bottom end of the range, your employer may be asked to explain why the lower end of the range was selected as the applicable market rate. The explanation may relate to your current level of experience, or your qualifications and skill set etc. For instance, the employer may argue that you don’t have some particular skills that are unique to the Australian market, and that you are paid the lower end of the market rate because you still need to acquire and develop these skills.
What if your GAE is below the market rate? Will the Department refuse the nomination application?
Simply put, the nomination application may be refused if the market rate requirement is not satisfied. The case officer may contact your employer and let them know that this requirement is not met and ask them whether they would like to withdraw the application (or they may just refuse the application).