Salary Market Rate for 457 Visas

From 14 September 2009, new 457 visa applicants must be paid at the "market rate". The market rate will depend on the occupation and location of the employee. Evidence must be provided by the employer as to what the market rate is for the occupation, unless the base salary is over $180,000. This replaces the previous system which allowed for grant of a 457 visa providing the salary level was above a clearly specified minimum for the occupation.

Upper Salary Threshold

For employees to be paid above $180,000, no evidence is required to establish that the employee is being paid at the market rate. This represents the income threshold for the highest income tax bracket.

Calculation of Market Rate

If the salary level is below $180,000, employers must provide evidence that the salary is in accordance with market rates for the position.

The applicable rate will depend on whether there is an Australian working in an equivalent position within the employer.

If so, then a comparison is made between the gross incomes of the Australian and the employee to be sponsored. Note that tax effectiveness of payment such as Living Away from Home Allowance (LAFHA) is generally taken into account in calclulating salary levels for this purpose. Benefits such as a car allowance can be taken into consideration, but items whose value cannot be estimated ahead of time, such as reimbusements, cannot be counted.

If there is no Australian working in a similar position in the business, then the following will need to be taken into consideration in assessing the market rate:

  • Any applicable industrial awards
  • Local knowledge sourced from unions or employer associations
  • Earnings data published by the ABS or market surveys
  • Recent job ads for equivalent positions

Temporary Skilled Migration Income Threshold

For a nomination to be approved, the base salary must be at least equal to the TSMIT - currently $49,330.

If the market rate for the occupation is less than the TSMIT, then the nomination will not be approved even if the salary offered is higher than the TSMIT. This is intended to stop employers artificially "inflating" salaries for positions requiring a lower level of skill.

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