Salary and Capacity to Pay for 186 Nominations

Two money tests apply to every TRT and Direct Entry nomination: the salary must meet the annual market salary rate and the income threshold, and the employer must have the capacity to employ the worker and pay them for at least two years. Here is what the Department checks.

The salary tests

Regulation 5.19 applies the same salary framework used for 482 nominations, with the Core Skills Income Threshold (CSIT) as the minimum. Both the annual market salary rate (AMSR) and the worker’s annual earnings, excluding non-monetary benefits, must be at least the CSIT, and the worker must be paid at least the AMSR. The CSIT is indexed each 1 July. See our page on income thresholds and our guide to the annual market salary rate.

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Capacity to pay

Officers look forward, using past figures. The assessment is based on the business’s financial records and its size and nature, with some judgement involved. If processing has taken a long time, officers may ask for updated documents:

• balance sheet and profit and loss statement for the latest financial year, with comparatives;
• the latest business tax return;
• BAS for each completed quarter since the end of that financial year;
• an explanation of any substantial losses.

Signs of trouble, such as external administration notices or a large recent loss, lead to further enquiries. Low turnover can also be relevant. See actively and lawfully operating a business.

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Other employment conditions

A nomination can be refused if the Department has information that the worker’s non-salary conditions, such as leave or deductions, will be less favourable than for an Australian doing the same work at the same location. There is no general obligation for officers to prove conditions are equal, but sponsor monitoring findings, complaints and other agency information can be used.

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High salaries

A very high salary is not a problem in itself. But the Department lists a salary above 250,000 dollars that is out of line with the market as one indicator that a position may have been created for a migration outcome. See genuine need in a 186 nomination.

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What you should do now

• Check the numbers: confirm the base salary meets both the market rate and the current CSIT.
• Prepare financials: have the latest financial statements, tax return and recent BAS ready.
• Explain any losses: if the business made a loss, provide a short explanation and evidence of recovery.
• Match conditions: make sure the worker’s leave and other conditions match those of Australian staff.