Market Salary – 457 Visa Holders & Applicants

 

One very common question that we get from 457 visa holders is – what should I be paid? I can’t tell you the exact amount that you should be paid. However, I can outline how you can determine the salary amount that you should be paid under migration legislation.

This article outlines the obligations that are imposed on sponsors / employers under Australian migration law in terms of salary payment for 457 visa holders. Hence, if your employer is not paying you this salary, they are in breach of migration law and the obligations that are imposed on employers / sponsors.

Before you ask what you exact salary should be, please note: this post pretty much explains that I can’t tell you what your exact salary should be. However, you should be able to work it out yourself by researching what your ‘equivalent terms and conditions of employment’ should be.

 

 

Equivalent terms and conditions – ‘Market Rate’ requirement

 

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 your ‘Guaranteed Annual Earnings’ (“GAE”) are at least equal to the Australian market salary rate for your role.

The sponsor must pay you the GAE that is specified in the nomination application or the ‘market salary rate’ as it varies over time, whichever is greater. This means that your sponsoring employer is obligated to periodically review your salary and increase it as the Australian market rate for your role increases.

Also, for an occupation to be sponsorable under a 457 visa, the Australian market rate for the role must be equal to or above the Temporary Skilled Migration Income Threshold (see below further explanation).

The nominating employer does not need to show that the ‘market rate’ requirement is met if the applicant’s GAE is $250,000 or greater. This is an exemption to this requirement.

 

What can be included in ‘Guaranteed Annual Earnings’

 

Guaranteed Annual Earnings (GAE) can only include the following types of payments and allowances:

  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.). This is just the agreed monetary value as agreed between yourself and your employer

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

 

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 that would be provided to an ‘equivalent Australian citizen or permanent resident’. This can be shown by providing a contract of an Australian citizen or permanent resident that is working in the same position and location as the role that you are nominated to perform for the purposes of the visa application.

Because the Department needs to compare ‘apples with apples’, there may be 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 specify 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 that is higher than the level specified in the relevant award.

 

No equivalent Australian working

 

Your employer may not have an Australian citizen or permanent resident that works as an employee in the same role and location as your nominated role.

If this is the case, then 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).

 

Finding appropriate market data for your role/industry

 

This is really just a matter of completing research. So here some of the resources that I use for finding market data:

The market 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.

You can also rely on job advertisements for similar roles in order to demonstrate the Australian market salary rate for the nominated role, as long as the advertisement relates to a role that is in the same location as the nominated role. You can use online advertising such as Seek, or local advertising such as newspaper advertisements.

 

What if your GAE is below the ‘market rate’?

 

Simply put, the nomination application may be refused if the equivalent terms and conditions of employment 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).

The Department may approve a nomination application where the applicant’s GAE is below the market rate. I have seen this happen when the difference between the applicant’s GAE and the market rate is relatively small.

Such nomination applications are always more risky because you are not satisfying one of the eligibility requirements. The employer can provide a statement which explains the short-fall between the applicant’s GAE and the market rate. The explanation can draw on things such as the applicant’s experience level, qualifications and/or skill set etc. But there is a very real possibility (and I would say likely possibility)  that the Department will refuse such an application.

 

Temporary Skilled Migration Income Threshold

 

The Temporary Skilled Migration Income Threshold (‘TSMIT’) only applies to 457 visas. This threshold is set to ensure that all 457 visa holders have sufficient income to support themselves.

In order for your nominated role to be sponsorable under a 457 visa, your sponsoring employer needs to show that the Australian market rate for your role is at least equal to TSMIT (which is currently AUD $53,900 per annum). You will note that with this eligibility requirement (which is addressed as part of the 457 nomination application that your sponsoring employer prepares and lodges), the case officer is comparing the Australian market salary rate for the nominated occupation, not your actual salary, against TSMIT. If the market rate for the nominated role is below TSMIT, then the position itself is not sponsorable under a 457 visa.

Consequently, even if your (proposed) guaranteed annual salary is above the market rate and TSMIT, if the market rate itself is below TSMIT, then the position is not sponsorableThe 457 nomination application will be refused.

The Department generally increases TSMIT every year in accordance with inflation.

 

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207 thoughts on “Market Salary – 457 Visa Holders & Applicants

  1. Kevin

    Hi Peng,

    I actually hold a 462 visa. In 10 days it will be 6 months since I started working in the company that I’m currently working…

    The company has decided to give me the sponsorship and they will be lodging my application for the 457 visa today.
    My question is: will I be in violation of my visa restriction if I keep on working for the company? Or since I’m applying for a new visa, a bridging visa is granted and the 6 months restrictions is reset and I can work for another 6 months or until a decision is being made on my 457 visa application?

    My 462 visa will expire on the 20th of October…

    Thank you

    Kevin

    Reply
  2. Elizabeth

    Hi Peng,

    I applied for a 457 visa back in March. My 462 visa expired in June, and I am now on a bridging visa.

    My employer claims they do not need to pay me as a full-time, salaried employee, as outlined in my application, until the 457 visa actually goes into effect. They have kept me on as a part time (though, nearly full time), casual employee for the duration of my work and holiday visa, and for my bridging visa. They have been paying me accordingly since March.

    Is this true? Are they only legally obligated to pay me the salary once the visa is approved?

    Thanks!

    Reply
    1. Peng Cheng Post author

      Hi Elizabeth,
      Yes there isn’t any obligation on the business to employ you on a full-time basis while you hold a bridging visa.
      PC

      Reply
  3. sukirti

    Hello Peng

    I am working at a taxi base from last one year as manager and business has a workshop as well. My employer wants to sponsor me as manager for 457 visa. is this possible to get 457 visa and under what occupation. i have checked under ANZSCO and i think transport company managers duties are related to my job. but i want to get your opinion

    thanks

    Reply
    1. Peng Cheng Post author

      Hi Sukirti,
      Sorry but I can’t provide advice just based on your comment information.
      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

      Reply
  4. Vincent

    Hi,
    I’m gonna have a sponsorship 457, but I didnt talk about salary and working hours.
    Salary per year is 55K, but is it for 38 or 45 or more hours per week ? Is there a legal average hours wage for 457 ?
    Thank you very much.

    Reply
  5. Jazz

    Hi Peng,

    Thanks for creating this blog.

    I had applied for 457 nomination on 28th Sep 2016 still havnt heard anything. Any idea department is working on which month nominations?? Thanks a ton!!

    Regards
    Jazz

    Reply
  6. LU

    Hi there,

    I am looking at 186 VISA Direct Entry stream and struggling with finding the market rate for job marketing specialist.

    I have tried look at Job Outlook and Hays salary guide as well as Fairwork, but they gave me different amounts of the minimum wages for marketing specialist.

    My question is, I noticed that there is a temporary skilled migration income threshold is AUD 53,900, does this threshold applies to all job type?and applies to 186 VISA? What would happen if the current market only paying, for example, AUD 48,000 for marketing specialist, which is under the threshold requirement.

    Thanks in advance for your help!
    Regards

    LU

    Reply
    1. Peng Cheng Post author

      Hi LU,
      TSMIT only applies to the 457 visa.
      Sorry but I can’t provide advice just based on your comment information.
      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

      Reply
  7. Terry

    Hi Peng,

    I am on 457 visa. Can I take my annual leave and fly outside australia? I am worried that in my absence my employer can terminate my contract. Can my employer terminate my contract if I am on approved leave?

    Thanks

    Reply
    1. Peng Cheng Post author

      Hi Terry,
      I am on 457 visa. Can I take my annual leave and fly outside australia? Yes you can as a 457 visa holder.
      I am worried that in my absence my employer can terminate my contract. Can my employer terminate my contract if I am on approved leave? Sorry but this is an employment law issue so I can’t advise in relation to this matter – this isn’t a migration law issue.
      PC

      Reply
  8. ron

    Hi Peng,

    My employer has sponsored me on 457 visa.
    We lodged a nomination in Dec 2015 Which got approved in Feb 2016.
    After that we lodged a visa application in Feb 2016, we got a request for Genuine Position in April 2016 and we replied on the same day as this question was asked in the nomination approval process.
    Its going to be 5 months since that communication from the department.

    As per your experience how likely can one be granted visa after nomination has been approved and can the department review the nomination in visa process.

    Thanks in advance.
    Ron

    Reply
    1. Peng Cheng Post author

      Hi Ron,
      DIBP can approve the application if they determine that you satisfy the relevant visa requirements.
      Sorry but I can’t provide further advice just based on your comment information.
      PC

      Reply
  9. Clement

    Hi,

    I am on my 457 visa and would like to take 3 weeks of unpaid holidays. However, if I do so I then won’t meet the $53 900 requirement. My question is can I take those 3 weeks of unpaid holidays without affecting my visa? Knowing that I would also like to apply for a Direct Strem Entry next year.

    Thanking you in advance.

    Kind regards,
    Clem.

    Reply
  10. Manjit singh

    Hi
    got 457 visa in feb 2014 on $60,000 and after completeing 2.5 years i just applied for the 186 pr visa nomination and visa last week. But i just checked my tax return for year 2014-15 that my gross salery was 55,140 instead of 60,000. Actually i went to my country for four weeks and i didn’t receive my salary for four weeks and this year i got more than 60000. Can i will be able get pr visa. Please let me know. Thanks

    Reply
    1. Peng Cheng Post author

      Hi Manjit,
      Sorry but I can’t provide advice just based on your comment information.
      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

      Reply
  11. Julia

    Hi
    We are a UK company hoping to nominate a UK employee to work for us in Australia under the 457 visa. We have been approved as a sponsor and are just processing the nomination.
    Under the questions about Terms and Conditions of Employment, where we haven’t got a equivalent Australian employee, what type of Work Agreement would the UK employee have. I’m assuming this would be an Individual Arrangement, rather than Collective/Enterprise?
    If this is the case, what ‘details’ do we need to add to the application? Is it sufficient to say, ‘see attached contract of employment’?. And how do we explain that the terms and conditions that will apply to the nominated person are at least as favourable to the Australian employee, when there is no Australian employee. I assume the note here would be that a salary survey has been performed, and then attach the salary surveys as evidence?

    Many thanks
    Julia

    Reply
    1. Peng Cheng Post author

      Hi Juila,
      Sorry but I can’t provide advice just based on your comment information.
      Please see Contact Us page and in relation to our Consultation Service – feel free to contact us if you need assistance.
      PC

      Reply
  12. Dane

    Hello Peng,

    I have just one quick question that I have lodged my TRA and TR file as a chef and now my employer ready to sponsor me 457, should I go for chef or cook sponsorship?

    Thanks

    Reply
    1. Peng Cheng Post author

      Hi Dane,
      Sorry but I can’t advice in relation to what the Department would approve just based on your comment information. Here are the two relevant ANZSCOs:
      http://www.abs.gov.au/ausstats/abs@.nsf/Product+Lookup/1220.0~2006~Chapter~UNIT+GROUP+3513+Chefs
      http://www.abs.gov.au/ausstats/abs@.nsf/0/171A4AC9F7BF1501CA2575DF002DA793?opendocument
      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

      Reply

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