Salary Requirement | 186 & 187 visa

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’:

  1. Your base wage
  2. 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)
  3. 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:

  1. 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)
  2. Reimbursements
  3. Compulsory superannuation contributions. Guaranteed contributions to superannuation that exceeds the contribution that is required under legislation can be counted towards GAE

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).

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Comments

11 Comments

Sohail · May 14, 2019 at 4:03 pm

Hi,
I am applying for 186-employer sponsored visa in July 2019 based on 2 years full time work experience( I was granted 457 prior to 18th April 2017). My actual annual earning is lesser than the expected amount shown in job contract letter provided for 457 visa initially. Will it cause any problem during 186 application or do I have to wait to earn the amount I was supposed to make annually?
I work as gp and there is no fixed salary, earning is based on amount of work we do, and fixed percentage goes to employer out of this earning.
I look forward hearing back from you, will greatly appreciate your advice.
Thank you

    Peng Cheng · May 19, 2019 at 9:33 am

    Hi Sohail,
    Sorry but to properly respond to your queries, I’d need to ask some questions and get some information/documents from you.
    Please see Contact Us page and in relation to our Consultation Service – feel free to contact us if you need advice in relation to your visa options.
    PC

Raj · January 19, 2019 at 5:34 pm

Hi Peng
I hold 457 visa 5/01/2013 to 1/05/2017 on occupation of ICT support officer,after finished my 457 visa ,I applied for 186 but unfortunately it was refused then I am on AAT review bridging visa. I found another employer can I apply again 186 direct entry with this new employer?
Thanks

    Peng Cheng · January 22, 2019 at 1:46 pm

    It would be best to contact us if you need consultation and advice in relation to your application. It isn’t really possible to obtain the information/documents that we need, or provide detailed advice via these comment fields which are intended for short/specific queries.
    Please see Contact Us page and in relation to our Consultation Service – feel free to contact us if you need advice in relation to your visa options.
    PC

Raj · January 12, 2019 at 8:32 pm

Hi Peng
Can I apply ENS direct entry 186 with occupation ICT SUPPORT OFFICER
I want apply in Tasmania

    Peng Cheng · January 17, 2019 at 8:57 pm

    Hi Raj,
    Unfortunately not as this occupation is not on the medium and long term list.
    PC

Larry · May 1, 2013 at 7:13 pm

Hi Peng,

Just a clarification about GAE

Base annual earning is $48, 394.84 as stated in organisation EBA

While there is another ON CALL allowance of $3,825.12 making total of $52,219.96 par annum.
My understanding is that this exceed the benchmark of $51,400 as stipulated by DIAC.

My concern is the ON CALL which is telephone or paging system outside the normal hours of duty, though is guaranteed as it is clearly stated in my of job description.

Could the ON CALL allowance earned outside normal hours of work but part of my job description be included in ‘Guaranteed Annual Earnings.

Thank you.

    Peng Cheng · May 2, 2013 at 10:18 am

    Hi Larry,
    I think that is OK to include.
    PC

      Larry · May 2, 2013 at 8:47 pm

      Thank you.

Jennifer · December 12, 2012 at 7:36 pm

Hi Peng,

I wanted to get your advice regarding Market Salary rates for General Practitioners given that they earn a percentage of Medicare rebates rather than a set salary. How can an employer demonstrate that they have met the market salary rates for that position given that the GAE is not a ‘set’ amount but rather a percentage? Does the employer have to state an amount they are willing to guarantee for the nomination to be approved?

Look forward to your advice.

Thanks
Jennifer

    Peng Cheng · December 12, 2012 at 8:26 pm

    Hi Jennifer,
    I don’t think that you can count that percentage because it is variable in nature. Yes the employer needs to confirm the GAE that you will be paid in the nomination application – and you’ll need to confirm this in the visa application.
    PC

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