On an Employer-Sponsored visa? Here's how much your sponsor should pay you (Part 2)

If you read Part 1 of this article, you already know the importance of salary thresholds for employer-sponsored visas. Now, let's look into the other salary requirement of sponsored work visas - the Australian Market Salary Rate.

This article explains what the AMSR is, its relationship with salary thresholds, and its effects on sponsors and visa holders. Understanding the AMSR is equally important as knowing what salary thresholds are. Both determine the appropriate salary for sponsored overseas workers. Let's unpack it.

AMSR in a nutshell

When employers nominate overseas workers for employer-sponsored visas, they must state the salary figure that is or would be paid to an Australian in the same position. This figure is the Australian Market Salary Rate (AMSR).

The AMSR applies to the following visas:

Skills in Demand (subclass 482)
Temporary Skills Shortage (subclass 482, pre December 2024)
Skilled Employer Sponsored Regional (subclass 494)
Employer Nomination Scheme (subclass 186)

The salary of the visa applicant must be at least the AMSR figure. It can be higher, but not lower. The idea is to prevent employers from undercutting Australian salaries by paying lower rates to overseas sponsored workers.

The difference between AMSR and salary thresholds

As explained in Part 1 of this article, salary threshold is a common term for the Core Skills Income Threshold (CSIT) and the Specialist Skills Income Threshold (SSIT). These thresholds set the minimum salary that businesses are permitted to pay their sponsored workers. Think of them as a flat-rate, entry-level requirement. They are not affected by the specifics of the nominated position.

The AMSR on the other hand, is specific to the position. It ensures that the salary offered to the sponsored worker is comparable to what an Australian worker would earn in the same role. While salary thresholds establish a floor for wages, the AMSR provides a benchmark for fair pay relative to what Australians earn in similar roles.

Salary thresholds are static, at least for the duration of the approved nomination for the worker's visa. The AMSR, however, can change during the visa period. For example, if an equivalent Australian worker in the business receives a pay raise, the AMSR increases. As a result, a pay raise for the sponsored worker will be required.

How to work out the AMSR

Migration legislation dictates how to work out the AMSR. Three methods are prescribed for different situations. The right method depends on the structure of the workforce, business policies relating to HR and payroll, and how employment contracts are written.

When there is an equivalent Australian

If an 'equivalent Australian' exists in the business, their annual salary will be the AMSR figure. 'Equivalent' means an existing worker in the same position, at the same workplace with similar skills and experience. 'Australian' means Australian citizen or permanent resident. Evidence, such as employment contracts and payslips of the equivalent Australian worker, is necessary to support the AMSR figure in this scenario.

There is no equivalent Australian

Due to the narrow definition of 'equivalent,' often there is no equivalent Australian to base the AMSR on. This is especially common in smaller workplaces or highly specialised roles. In such cases, employers use external evidence, such as salary surveys, statistical data, and job adverts to determine the AMSR. A clear explanation of how the AMSR was determined is required, in reference to the evidence.

The salary is based on an industry award

Industry awards and enterprise agreements set minimum pay rates for various jobs. If the nominated position is covered by an award, and the proposed salary is based on the award rates, sponsors are required to give details on the award, job classification, and level.

Interaction between salary thresholds and the AMSR

For employer-sponsored nominations and visas, both the AMSR and the relevant salary threshold must be satisfied. The salary offered to a sponsored worker must satisfy the relevant threshold (CSIT or SSIT) AND the AMSR. Sounds confusing? Let's break it down.

If the AMSR for a particular role is higher the salary threshold, the employer must offer a salary that meets or exceeds the AMSR. On the other hand, if the position's AMSR is lower than the salary threshold, the nomination lodged with Home Affairs cannot be approved.

Setting the AMSR right on the salary threshold might sound like an easy solution to some sponsors, however it is rarely a good idea.

Where things can go wrong

Ensuring compliance with both salary thresholds and the AMSR requires careful attention to detail and thorough documentation.

Gathering appropriate external salary evidence takes time, especially for highly specialised, niche positions. Some sources are not suitable, for example, outdated salary statistics and job adverts with wide salary ranges.

Variations in job titles and responsibilities may raise questions about what constitutes an equivalent role. For example, Data Analysts vs. Data Scientists. This is also the case with less or more experienced workers, who are not regarded as equivalent.

Classifying a position to the correct award level can be a tedious task. Awards do not always reflect market conditions. Caution is warranted when relying on award rates to meet the AMSR as they can be lower than the salary threshold - a potential cause for a refusal.

The components of the Annual Market Salary Rate (AMSR) differ from those used in calculating salary thresholds. Non-monetary benefits, such as accommodation and meals, may be included in the AMSR calculation provided they have an established value. However, employers are typically not allowed to use these benefits to meet the salary threshold requirements.

Closing thoughts

The AMSR and salary thresholds are intertwined with one another. Compliance with these requirements is crucial; however, they cannot be considered in isolation. They are influenced by other criteria such as the Genuine Position criterion and Labour Market Testing. A holistic approach is necessary to ensure the business can meet its nomination requirements and comply with them post-approval. Migration agents and lawyers with expertise in this area of migration law are the appropriate advisors for these matters.

Stay tuned for more updates on immigration and employer-sponsored visas. Subscribe to the next ImmiUpdate below to stay informed.

For more information please Contact Us or email elan@ryshermigration.com.au

Elan Rysher is a Registered Migration Agent and Qualified Student Counsellor. He is the main Writer for ImmiUpdates and the founder of Rysher Migration. Being a former migrant himself, Elan is passionate about helping others fulfil their Australian dream.

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