Who Covers the Costs When Sponsoring an Employee on an Australian Working Visa?

When sponsoring an overseas employee, understanding the allocation of costs is vital to ensure compliance with Australian migration law. Sponsors and applicants must be aware of the legal requirements that apply to each stage of the employer-sponsored visa process.

Introduction: Employer Sponsorship and Cost Responsibilities

Cost allocation under an employer sponsored visa pathway is mandated by legislative and regulatory compliance requirements. Incorrect allocation of costs between sponsor and visa applicant may result in a breach of sponsorship obligations, including through unauthorised reimbursements, wage deductions, or ancillary agreements.

This guide explains which visa sponsorship costs employers must pay, which employer sponsored visa costs can be shared by agreement, and what employers cannot do under the Migration Regulations.

Overview of Employer Sponsorship Obligations

Most employer sponsored arrangements follow three steps:

1. Sponsorship approval (often standard business sponsorship), where required
2. Nomination applications for the role
3. The individual visa application

Each step creates records and reporting expectations for the sponsor. This procedural structure applies across employer sponsored pathways, including the Skill in Demand (subclass 482) visa framework.

Why Understanding Cost Responsibilities Matters

Regulation 2.87 of the Migration Regulations restricts the recovery of certain costs by sponsors. It imposes an obligation on employers not to recover, transfer, or take actions that would result in another person being responsible for certain sponsorship costs. Accordingly, the sponsoring employer is required to pay the prescribed sponsorship costs and must not engage in direct or indirect cost-shifting arrangements.

Mandatory Costs Employers Must Cover

The following cost categories are mandatory employer-paid expenses under the employer sponsorship framework:

Standard Business Sponsorship Application Fees

Where applicable, an application for approval as a standard business sponsor attracts a prescribed government charge. The Department of Home Affairs commonly lists this as AUD 420 for a Standard Business Sponsorship application associated with the SID (subclass 482) programme. This fee forms part of the prescribed sponsorship costs under the Migration Regulations.

Nomination Application Charges

Employers must fund nomination applications and the relevant nomination fee. For SID 482, published fee schedules commonly list a nomination fee of AUD 330. This nomination fee is a government fee item that is paid by the employer. These nomination applications and associated government fees constitute mandatory sponsorship costs for which the employer is solely responsible.

호주인 기술 기금(SAF) 부과금

The SAF levy is a mandatory training contribution payable by the employer at the nomination stage and linked to the Skilling Australians Fund. For many sponsors, the SAF levy is AUD 1,200 per year of sponsorship where annual turnover is under AUD 10 million, and AUD 1,800 per year if annual turnover is AUD 10 million or more. The SAF levy must be paid directly by the employer and is not recoverable from the visa applicant or any other party.

Recruitment and Advertising Expenses

Recruitment and advertising expenses related to hiring an overseas worker are employer costs. Employers are prohibited from transferring or recovering recruitment and advertising costs from the sponsored worker, either directly or through payroll mechanisms.

Professional and Legal Fees for Sponsorship/Nomination

Where a business engages professional advisers for sponsorship or nomination applications, any associated fees are the responsibility of the employer. This includes legal fees and costs charged by a migration agent for sponsorship and nomination work. Migration agent fees related to sponsorship or nomination must be borne by the employer and cannot be recouped from the visa applicant.

Costs Employers Can Share or Negotiate

The following expenses are not classified as mandatory sponsorship costs and may be paid by the visa applicant or by the employer, where offered as part of an employment package. Comparable cost allocation principles apply to permanent employer-sponsored pathways, including the Employer Nomination Scheme (subclass 186). Comparable considerations may apply under Skilled Employer Sponsored Regional arrangements.

Visa Application Charges (Optional Employer Coverage)

The visa application charge is generally paid by the applicant, although some employer-sponsored businesses choose to cover the visa application fee as a negotiated employment benefit. As of 1 July 2025, the Department of Home Affairs lists the base visa application charge for the SID (subclass 482) programme at AUD 3,210 for the primary applicant.

This charge forms part of the government fees payable in connection with the visa application. Where the employer elects to pay the visa application fee, this should be clearly documented as a discretionary benefit and must not be subject to recovery from the visa applicant.

English Tests, Skills Assessments and Police Checks

English tests, skills assessments, and police checks are typically paid by the visa applicant as part of the visa application process. Employers may, at their discretion, contribute to these costs. Such contributions should be documented in the employment agreement and must not be recoverable from the visa applicant.

Medical Examinations and Document Translation Costs

Medical examinations and document translation costs are generally treated as personal visa application costs and paid by the visa applicant.

Health Insurance and Relocation Support

For temporary visa holders, and in some permanent visa contexts, adequate health insurance is often required and commonly funded by the visa applicant. This is particularly relevant for visa holders on employer-sponsored visas. Employers may, as part of a broader employment package, choose to provide health insurance or relocation support, such as temporary accommodation, to the sponsored employee.

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Legal Compliance: What Employers Cannot Do

The following prohibitions outline what employers are not permitted to do when allocating costs under an employer-sponsored visa arrangement.

No Recovery of Mandatory Sponsorship Costs From Employees

Employers cannot pass on costs linked to sponsorship approval, nomination applications, or the SAF levy. Regulation 2.87 prohibits a sponsor from shifting those sponsorship costs to the sponsored employee.

Prohibited Wage Deductions and Clawback Agreements

Wage deductions, payroll set-offs, and ‘clawback’ clauses must not be used to recover sponsorship costs from the sponsored employee. Even if a worker agrees, the agreement does not override the migration cost rules. Sponsors should also avoid charging workers for compliance and monitoring activities required to meet sponsorship obligations.

Consequences of Non-Compliance and Penalties

Breaches may attract sponsor sanctions and significant penalties for employers sponsoring workers under an employer-sponsored visa arrangement. Civil penalties of up to AUD 396,000 per contravention may be imposed on a corporation for breaches of sponsorship cost obligations.

In more serious cases, non-compliance may constitute a criminal offence, with potential penalties including imprisonment for up to two years, subject to the circumstances of the breach.

Best Practice Tips for Employers and Sponsored Employees

The following tips reflect commonly adopted practices for managing cost allocation in employer-sponsored visa arrangements:

1. Confirm the cost allocation between the employer and the sponsored employee prior to lodging nomination applications and prior to payment of the visa application charge.
2. Pay employer items directly from the business (for example, standard business sponsorship, nomination applications charges, the SAF levy, and migration agent fees for sponsorship work) and retain invoices.
3. Keep visa application costs separate. If the employer contributes, label it clearly as a benefit in employment contracts and ensure it does not conflict with ongoing sponsorship obligations.
4. Employers should budget for post-grant obligations. Pursuant to regulation 2.80, sponsors must pay reasonable and necessary travel costs to enable the sponsored person to depart Australia upon written request by the person or the Department.

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자주 묻는 질문(FAQ)

Who Must Pay for Employer Sponsorship Costs in Australia?

The employer must pay the mandatory employer sponsorship costs, including sponsorship approval fees, charges associated with nomination applications, recruitment and advertising expenses, employer professional service fees for sponsorship and nomination work, and the Skilling Australians Fund, viz., the SAF levy linked to the Skilling Australians Fund.

Can an Employer Ask the Employee to Reimburse Sponsorship Fees?

No. Employers must not seek reimbursement for costs that Regulation 2.87 prohibits transferring, including charges associated with nomination applications, nomination fee items, and the Skilling Australians Fund, viz., the SAF levy.

Which Visa Costs Can Employees Legally Cover Themselves?

The visa applicant is typically responsible for personal visa application costs, such as police checks and medical examinations, as well as the visa application charge, unless the employer elects to cover that charge as part of the employment arrangement.

Are Recruitment and Advertising Costs Recoverable From the Employee?

Recruitment and advertising expenses are employer costs and must not be recovered from the employee. Recovering these expenses would breach the sponsorship costs rules under the Migration Regulations.

What Penalties Apply If a Sponsor Breaches Cost Obligations?

Sponsor sanctions and court penalties can be substantial. Under the Migration Act and associated enforcement provisions, civil penalties of up to AUD 396,000 may be imposed on a corporation for each contravention of sponsorship cost obligations. In serious cases, non-compliance may also give rise to criminal liability in certain circumstances.

Conclusion: Clear Cost Allocation for Employer-Sponsored Visas

Clear cost allocation is a legal requirement under an employer-sponsored visa pathway. The employer pays mandatory sponsorship costs, including standard business sponsorship, nomination applications, recruitment expenses, relevant professional service fees such as legal fees, and the SAF levy. The visa applicant pays for personal visa application items, unless the employer elects to provide additional support for certain visa-related costs.

Australian Migration Lawyers provides comprehensive guidance to employers and sponsored employees in relation to sponsorship cost obligations, ensuring all arrangements are compliant with Australian migration law.