Who covers the costs when sponsoring an employee on an Australian working visa?

When an organisation sponsors an employee on an Australian visa—such as the Skills in Demand (subclass 482) visa, the Skilled Employer Sponsored Regional (subclass 494) visa, or Employer Nomination Scheme (subclass 186) visa—there are distinct cost responsibilities that employers must cover and costs that can be covered by the employer or the visa applicant/employee.

Expenses employers must cover

Under Australia’s migration legislation, employers are legally required to pay the following costs associated with sponsoring an employee on a work visa:

1. Sponsorship and nomination costs
   • Standard Business Sponsorship and nomination costs for the 482 visa require direct payment by the employer.
     
2. Skilling Australians Fund (SAF) levy
   • Calculated based on annual turnover and the length of stay, this levy must be paid by the employer.
     
3. Recruitment and advertising costs
   • All costs related to job advertising, recruitment processes, and any travel involved in hiring must be covered by the employer—these costs cannot be recovered from the visa applicant.
     
4. Professional/legal fees related to sponsorship/nomination
   • This includes migration agents/lawyers, legal advice, or document preparation specifically connected to sponsorship and nomination.

Note: Passing these mandatory costs—like the SAF levy, nomination fees, standard business sponsorship establishment, recruitment charges, or related agent/legal fees—onto employees is explicitly prohibited and can lead to penalties and reputational damage.

Costs employers may negotiate with employees

Certain expenses are legally allowed to be shared or transferred, provided there is a clear, documented agreement:

• Visa application costs
  • While employers may choose to pay the primary applicant’s visa application costs, employees may agree to cover theirs—or their dependents’—as part of a negotiated arrangement.
    
• Employee third-party costs
  • Costs for English tests, migration skill assessments, police clearance certificates, medical examinations, document translations, and health insurance generally fall to the employee—unless the employer chooses to assist.

For permanent visa nominations such as the ENS (subclass 186) & Regional Sponsored (subclass 494) nominations, the SAF levy must be paid by the employer. These nomination costs, whilst not strictly mandatory, government guidelines expect employers to cover these costs.

Ensuring compliance

• Ensure there are no reimbursements for mandatory costs
  • Employers cannot require repayment of sponsorship, nomination, SAF levy, or recruitment expenses—even indirectly.
    
• Ensure there are no salary deductions for sponsorship/visa costs
  • Deducting visa-related expenses from an employee’s salary or benefits is unlawful.
    
• Ensure no indirect cost transfer schemes are entered into
  • Structuring arrangements that shift mandatory employer costs to employees in any form – even via third parties – is prohibited.

However, employers may legally enter into a loan agreement or include a clawback clause for optional costs (e.g., visa application by the employee), provided agreements are fair, transparent, and fully documented. Always seek professional legal advice to ensure compliance with the Migration Act and Fair Work Act.

Best practices for employers

• Detail visa cost responsibilities in employment contracts
  • Identify which party pays what—visa fees, English language tests etc. upfront in the employment contract.
    
• Directly pay mandatory costs
  • Cover sponsorship, nomination, recruitment, SAF levy, and related migration agent/legal fees. Do not ask employees to reimburse these.
    
• Document optional cost sharing agreements clearly
  • If offering reimbursements or loans for visa costs or personal documentation requirements, ensure you have formal and clear agreements.
    
• Stay up-to-date and seek legal advice
  • Laws and fees can and do regularly change (e.g., visa/nomination government charges and levy structures); regular legal advice is highly recommended.
    
• Monitor compliance risks
  • The Australian Border Force (ABF) is increasingly auditing business sponsors—unlawful cost recovery or exploitation can result in visa refusals, cancellation, significant fines, or sponsorship bans.

Overview: Who pays what?

Further assistance & advice

If you have any questions regarding the costs responsibilities when sponsoring an employee on a working visa, or your sponsorship obligations in general, please contact our office professional immigration legal advice.