One of the most common questions we hear from both employers and employees going through the Subclass 186 (Employer Nomination Scheme) Direct Entry process is: who pays for what? The answer isn’t always as simple as you might think, and getting it wrong can actually create legal problems.
The Key Rule: Employers Must Pay the SAF Levy
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The most important rule to understand is that under the Migration Act, the employer (sponsor) must pay the Skilling Australians Fund (SAF) levy. This is a non-negotiable requirement – the employer cannot pass this cost on to the visa applicant. Asking or requiring the employee to pay the SAF levy could constitute an offence under section 245AR of the Migration Act.
The SAF levy amount depends on the size of the business and the visa pathway, but it represents a significant cost that the employer needs to budget for.
What Can the Visa Applicant Pay?
For the 186 Direct Entry stream, the visa applicant is generally permitted to pay:
- Professional fees – The migration agent’s service fees for preparing both the nomination and visa application
- Department nomination fee – The government fee for lodging the nomination application
- Visa application charge (VAC) – The government fee for lodging the visa application itself
- Skills assessment fees – If a skills assessment is required
- Health examination costs – Medical examinations required as part of the visa application
- Police clearance fees – The cost of obtaining police certificates from relevant countries
This is different from the Subclass 482 (Temporary Skill Shortage) visa, where the employer typically bears a greater share of the costs. The 186 Direct Entry stream has more flexibility because it’s a permanent visa pathway and the rules around cost-sharing are somewhat different.
How Is the SAF Levy Paid?
A practical complication arises because the SAF levy and the Department’s nomination fee are often paid at the same time during the nomination lodgement process. Since the employer must pay the SAF levy but the applicant can pay the nomination fee, some migration agents handle this by using the employer’s credit card to pay both amounts at lodgement, and then having the applicant reimburse the employer for the nomination fee separately.
Whatever arrangement you use, it’s important to keep clear records showing that the employer paid the SAF levy from their own funds.
What Employers Should Not Do
To stay on the right side of the law, employers should never:
- Ask the employee to pay or reimburse the SAF levy
- Deduct the SAF levy from the employee’s wages
- Include the SAF levy as part of a “cost-sharing” arrangement with the employee
- Make the employee’s employment conditional on paying costs that should be borne by the employer
Getting the Arrangement Right
Before starting the 186 Direct Entry process, it’s a good idea for both the employer and the visa applicant to have a clear understanding of who will pay for each component. Putting this in writing can help avoid misunderstandings and ensure compliance with the Migration Act.
If you’re unsure about the cost-sharing rules for your 186 visa application, a registered migration agent can help clarify the requirements and ensure everything is done correctly.
Disclaimer: This blog post is intended for general informational purposes only and does not constitute legal or migration advice. Every immigration matter is unique, and outcomes depend on individual circumstances. For advice tailored to your specific situation, please book a consultation with one of our registered migration agents.
Reviewed by VisaTasker Migration Services
MARA Registered Migration Agent · MARN 2318017
This article is written and reviewed by VisaTasker Migration Services, a MARA-registered migration agency based in Australia. As registered agents, we are bound by the Migration Agents Code of Conduct and required to provide accurate, up-to-date advice based on Australian migration legislation. Information is reviewed against the latest Department of Home Affairs policy.
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