1. How Employer Sponsorship Works
Australia's employer-sponsored migration program is built around a two-party structure: the employer (sponsor) and the overseas worker (nominee). Neither can proceed independently — the employer must be approved as a Standard Business Sponsor before nominating a worker, and the worker cannot be granted a visa without an approved nomination underpinning the application.
The primary temporary visa in this program is the Subclass 482 Temporary Skill Shortage (TSS) visa. The pathway to permanent residence runs through the Subclass 186 Employer Nomination Scheme (ENS) or, for regional positions, the Subclass 494 Skilled Employer Sponsored Regional visa. All of these pathways begin with Standard Business Sponsorship (SBS) approval.
The process follows three sequential stages:
- Stage 1 — SBS Approval: The employer applies to become an approved Standard Business Sponsor. This is a business-level approval, not tied to any specific worker. Once granted, it is valid for 5 years.
- Stage 2 — Nomination: For each worker to be sponsored, the employer lodges a nomination identifying the worker, the position, the salary, and the relevant ANZSCO occupation code. Labour Market Testing evidence is assessed at this stage.
- Stage 3 — Visa Application: The worker lodges the visa application, which can be lodged concurrently with or after the nomination. The visa cannot be granted before both the SBS and nomination are approved.
An approved SBS allows the employer to nominate multiple workers across different roles during its 5-year validity, subject to meeting the criteria for each individual nomination.
2. Becoming an Approved Sponsor
Core Eligibility Requirements
- Lawfully operating: The business must be legally registered and actively trading in Australia. A registered but non-trading entity will not meet this requirement. The Department assesses lawful operation through ABN/ACN status, ASIC registration, financial records, and evidence of genuine commercial activity.
- No adverse immigration history: The business and its key personnel must not have a history of immigration non-compliance — including previous sanctions, cancellations, or bans — related to sponsorship obligations.
- Genuine need to sponsor: The business must be able to demonstrate a genuine commercial need for an overseas worker in the nominated occupation. While the primary assessment of genuine position occurs at the nomination stage, it informs the SBS assessment as well.
- Commitment to Skilling Australians Fund: Sponsors must commit to paying the SAF levy obligations for each nomination, which represents a mandatory contribution to Australian workforce training.
Accredited Sponsor Status
High-volume users of the employer sponsorship program can apply for Accredited Sponsor status. Accredited Sponsors receive priority processing for nominations and visa applications. Accreditation requires a demonstrated track record of compliant sponsorship conduct, a minimum number of current sponsored workers, and a commitment to ongoing compliance practices. Accredited Sponsors may also face reduced LMT scrutiny for certain occupation categories.
3. Sponsor Obligations and Compliance
Approval as a Standard Business Sponsor is not a one-time regulatory event. It creates a continuous set of obligations that persist for the duration of each sponsored worker's visa. The Department of Home Affairs conducts proactive compliance audits and can investigate any sponsor at any time without prior notice.
| Obligation | What It Requires | Consequence of Breach |
|---|---|---|
| Equivalent terms and conditions | Worker must receive terms no less favourable than an Australian in the same role | Civil penalty, sponsor cancellation |
| Notification of changes | Notify DHA within 28 days of employment cessation or business structure changes | Formal warning, civil penalty |
| Record keeping | Maintain employment, pay, and duties records for the sponsorship period | Compliance failure in audit |
| Cooperation with inspections | Allow Department inspectors access to premises and records | Criminal offence for obstruction |
| Return travel costs | Pay reasonable return travel if worker requests this before becoming a PR | Enforceable debt obligation |
The Skilling Australians Fund (SAF) Levy
The SAF levy is a mandatory contribution paid by employers at the time of nomination lodgement. It funds training and apprenticeship programs for Australian workers. The levy is calculated per year of visa granted (rounded up to the nearest year) at the following rates:
- Small business (annual turnover under $10 million): AUD $1,200 per year of visa duration
- Large business (annual turnover $10 million or more): AUD $1,800 per year of visa duration
4. The Nomination Process
The nomination is where the substantive eligibility assessment of each individual position and worker occurs. An approved SBS is a prerequisite, but the nomination is assessed independently on its own merits.
Key Nomination Requirements
- ANZSCO occupation code: The position must be classified under a relevant ANZSCO code on either the Short-term Skilled Occupation List (STSOL) or the Medium and Long-term Strategic Skills List (MLTSSL). The worker's actual duties must align with the ANZSCO unit group description — a title match is not sufficient.
- Genuine position: The role must be a real, full-time position within the business. It cannot be created solely for the purpose of sponsoring the particular worker, and the work must be genuinely needed by the business.
- Salary requirements: The nominated salary must meet or exceed both the Core Skills Income Threshold (CSIT — AUD $79,423 for nominations lodged 1 July 2026 to 30 June 2027) and the Annual Market Salary Rate (AMSR) for the occupation in the relevant location — whichever is higher. Where the AMSR for an occupation exceeds the TSMIT, the AMSR controls.
- Labour Market Testing: In most cases, the employer must demonstrate reasonable efforts to recruit an Australian citizen or permanent resident for the role before nominating the overseas worker. LMT must have been conducted within 4 months of nomination lodgement and must meet specific advertising requirements.
Concurrent Lodgement
The SBS application, the nomination, and the visa application may all be lodged simultaneously. This concurrent lodgement approach is common for businesses under time pressure and can reduce total end-to-end processing time significantly. However, the visa cannot be granted until both the SBS and nomination are approved — so the visa decision cannot pre-empt approval of earlier-stage applications.
5. Costs and Timelines
| Stage | Fee | Payable By |
|---|---|---|
| Standard Business Sponsorship | Nil | Employer |
| SAF levy — small business (<$10M turnover) | AUD $1,200/year of visa | Employer (non-recoverable from worker) |
| SAF levy — large business ($10M+ turnover) | AUD $1,800/year of visa | Employer (non-recoverable from worker) |
Typical Processing Timeframes (2026)
6. Common Employer Mistakes
Salary Set at TSMIT Without Checking the AMSR
The most common nomination error is setting the nominated salary at exactly the TSMIT minimum (AUD $79,423) without verifying the Annual Market Salary Rate for the specific occupation and location. In high-demand occupations or major metro centres, the AMSR routinely exceeds the TSMIT. A nomination with a salary that meets TSMIT but not the AMSR will be refused.
ANZSCO Mismatch Between Title and Duties
Assigning an ANZSCO code based solely on a job title — without verifying that the worker's actual duties align with the ANZSCO unit group — is a consistent source of refusals. Case officers read the position description against the ANZSCO criteria, not just the title.
Inadequate Labour Market Testing Evidence
LMT that does not meet all the prescribed requirements — correct platforms, minimum 28-day advertising period, required content including salary range, and completion within 4 months of nomination — will generate a Procedural Fairness letter and delay processing. See the dedicated LMT guide for the full requirements checklist.
Cost Recovery Arrangements
Employment contracts or side agreements that require the worker to repay any part of the sponsorship costs — including the SAF levy — are a direct compliance breach. These arrangements will be identified during audits and result in sanctions regardless of whether the worker has agreed to them.
Failing to Notify Cessation of Employment
When a sponsored worker's employment ends, the sponsor must notify DHA within 28 days. Failure to notify is a standalone breach that attracts penalties independent of whether the worker has made other immigration arrangements.