The immigration process can be filled with jargon and acronyms, so it’s no wonder people get confused.
The Temporary Skilled Migration Income Threshold (TSMIT) is no exception, so hopefully this information will assist 457 Visa holders to navigate their way around what can be a confusing process.
TSMIT was established to ensure 457 visa holders have sufficient income to support themselves independently whilst living and working in Australia. This is important given these workers do not have access to a range of government support which is available to Australian Permanent Residents and Citizens. The TSMIT is currently set at $53,900.
Market Salary Rates were introduced to ensure 457 visa holders will benefit from the same terms and conditions of employment provided to Australians undertaking equivalent work in the same workplace at the same location. Where there are Australians performing equivalent work at the same workplace, the 457 employee must be paid at the same rate. Please note that the intent of Australia’s 457 visa program is to fill labour shortages and bring in skilled workers into Australia to work for an approved business for up to four years.
Where there are no Australians performing equivalent work at the same workplace, the employer can demonstrate the Market Salary Rate by providing evidentiary documentation that could include (but not limited to):
- Published salary surveys/data from accredited/recognised sources; or
- Recent advertisement for the same job in the same location with salary data; or
- Reference to applicable awards, etc.
TSMIT should not have any bearings as to what the 457 visa holders should be paid at the workplace and should not to be seen as the actual market salary rate itself.
However, the market salary rate of the nominated position must be at or above the TSMIT or the position could not be sponsored. The employer cannot simply inflate the salary offered to be above TSMIT for the sole purpose of the visa application.
So you may be asking “Why should I pay the 457 visa holder at or above $53,900 when I am only paying my Australian staff $50,000 as per their industry award”? In this instance – the market rate for the said position is $50,000.
Since the market rate is below TSMIT, it is the Department’s opinion that for the purpose of the visa application, the applicant will not be able to support themselves whilst in Australia, and very likely the position itself, is not at a highly skilled level, and hence, could not be sponsored.
“Can I offer the 457 visa holder $53,900 even though, my Australian staff is only getting paid $50,000”? The answer is NO, because you cannot simply inflate the salary for the purpose of the 457 visa application.
If however, the nominated position is not at an equivalent level to what existing Australian staff members are currently undertaking, the offer can be made in line with supporting evidence from external market salary rates mentioned above.
For the purpose of comparison, it is the guaranteed annual earnings (which incorporates benefits such as fixed car or housing allowances) and not the base salary that is being compared to the market salary rate. Items whose value cannot be estimated/guaranteed ahead of time, such as overtime or bonuses, cannot be counted.
For further information, please do not hesitate to contact one of our friendly registered migration agents to discuss.
Yin Tan MARN No: 0320090