IMPACT – LOW

What is the change? Australia’s temporary skilled migration income threshold (TSMIT) will remain set at A$53,900 per year. The market salary exemption threshold, however, will be significantly reduced from A$250,000 to A$180,000 per year.

What does the change mean? Employers will be exempt from rules requiring them to evidence paying market-rate salaries for any primary 457 visa holders or applicants who will receive earnings of at least A$180,000 per year.

  • Implementation time frame: 18 April 2015.
  • Visas/permits affected: Subclass 457 visas.
  • Who is affected: Employers sponsoring foreign nationals on Subclass 457 visas.
  • Business impact: The change in the market salary exemption threshold is good news for businesses.

Background: The TSMIT will remain at A$53,900 per year, where it has been set since 1 July 2013. The TSMIT represents the minimum market salary rate that an equivalent Australian employee would receive for the same, or similar, position that a sponsoring employer is seeking to fill with a foreign national. Foreign nationals must receive earnings in accordance with the relevant market salary rate for the nominated position or occupation. If the market salary rate for the position the business wishes to fill falls below the TSMIT, then the relevant 457 nomination application criteria will not be met. An exemption to evidence that the market salary rate requirement will be met applies to those primary 457 visa applicants/holders who will receive annual earnings of A$180,000 or more.

BAL Analysis: The drop in the market salary exemption threshold is good news for employers, as they will not have to worry about market salary rate requirements for primary 457 visa holders/applicants making at least A$180,000 per year.

This alert has been provided by BAL Australia. For additional information, please contact australia@bal.com.

MARN: 9683856

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