Employer Update on TSMIT Increase & Ongoing Sponsorship Obligations

The Temporary Skilled Migration Income Threshold (TSMIT) sets the minimum annual salary that must be offered to certain sponsored visa holders. From 1 July 2026, the TSMIT will increase to $79,499. This change is significant for employers who sponsor overseas workers under Australia’s Skills in Demand program and Employer Nomination Scheme and links to the broader obligation to ensure equivalent terms and conditions of employment between Australian and overseas employees.

All nominations under the Skills in Demand program and Employer Nomination Scheme, where income thresholds are statutory determined requirement that are submitted by 30 June 2026 can be at or above the current TSMIT of $76,520 (excluding superannuation) and will be processed at that level.

However, from 1 July 2026, any new nomination lodged on or after that date must offer a base remuneration of at least $79,499 (excluding superannuation).

Importantly, meeting the new TSMIT figure alone will not be sufficient. Employers must continue to comply with the Annual Market Salary Rate (AMSR) requirement. This means that a sponsored worker must be paid the higher of the TSMIT or the market salary rate that would apply to an Australian employee performing the same role in the same location. The intention is clear, overseas workforce must not be used to undercut local wages.

In practical terms, employers must ensure that overseas employees are engaged on terms and conditions that are no less favourable than those provided to Australian workers performing equivalent work. This obligation extends beyond base salary and includes allowances, overtime and penalty rates, leave entitlements, hours of work, and other employment benefits. Employers cannot lawfully reduce pay or conditions because a worker holds a temporary visa, nor can they recover sponsorship or nomination related costs. Any arrangements with an overseas national, a temporary work subclass 482 visa holder that results in the employee receiving less than their lawful entitlement.

The upcoming increase to $79,499 should prompt employers to review their current workforce arrangements. Organisations should consider whether any sponsored employees are paid close to the current threshold and whether upcoming nominations or visa renewals will occur after 1 July 2026. It is also prudent to assess whether existing salary levels of sponsored overseas employees genuinely reflect the market rate for the occupation, taking into account internal comparators, applicable modern awards or enterprise agreements, industry salary data, and current recruitment trends.

Sponsor Monitoring team within the Department of Home Affairs continue to closely scrutinise salary compliance in the employer sponsored migration program. Failure to meet the TSMIT or the market salary rate requirement, or to provide equivalent terms and conditions, may expose employers to significant consequences, including civil penalties, sponsorship sanctions, back payment obligations, reputational damage, and potential visa impacts for all sponsored employees.

Ultimately, the increase in TSMIT reinforces a long-standing principle of Australia’s skilled migration framework: sponsored workers must be paid in line with Australian standards. Employers who take proactive steps now to review salaries, benchmark market rates, and ensure parity across their workforce will be well positioned to manage the transition smoothly and remain compliant.

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