01 Jun What Is the Annual Market Salary Rate (AMSR) And How Can I Ensure Our Business Remains Compliant?
One of the documents that are required for submission to nominate workers is the Salary Report, which shows that the overseas worker is paid no less than an Australian worker would be doing the same work in the same location, that Is the Annual Market Salary Rate (AMSR).
The purpose of this requirement is not only to make sure that the business is paying the staff correctly but that the sponsor is paying the sponsored employee the respective AMSR for their unique circumstances which is first and foremost the obligation of the business owners in multiple types of employer sponsorship.
Difference between the Annual Market Salary Rate (AMSR) and Temporary Skilled Migration Income Threshold (TSMIT)
Essentially, the AMSR is a comprehensive report outlining the current salary rates and the determination of the appropriate salary while taking into consideration the skill level, location, qualifications, experience, and other variables to ensure that the sponsoring business is not underpaying or overpaying the sponsored employee.
Whereas the TSMIT is the benchmark that sets the minimum annualised salary for sponsored employees under the applicable visa subclass, which currently sits at a base of AUD 53,900 (increasing to $70,000 as of 1st July 2023).
Visa Types That Need a Salary Report Justification Report
- 407 Training Visa (not essential, but highly recommended for salaries oddly low or high)
- 482 Temporary Skill Shortage Visa
- 186 Employer Nomination Scheme Visa
- 494 Skilled Employer-Sponsored Regional Visa
For these abovementioned visas, the reason why it is a requirement is for the sponsoring business to ensure that they are not underpaying their sponsored staff compared to what they would pay an equivalent worker, just because they are on a working visa. It curbs the unfair labour practices and is a deterrent for businesses who attempt to take advantage of visa holders, and this is a high priority for the Department of Home Affairs and Fair Work to stamp out. A more practical application for the Salary Justification Report is for the business to be paying the fair wage across their organization, and make sure that, as the biggest expense, salaries are determined fair and square.
For visa application purposes, being able to outline and document the salary report would ensure both sponsoring businesses and sponsored employees that they have complied with the minimum salary that sponsored staff for visa subclasses 482, 186, and 494 are according to the set TSMIT which is currently $53,900 and increasing to $70,000 as of 1st July 2023. Without reaching this threshold, the nomination would be ineligible. Consequently, if it is found that there are an Australian citizen and Permanent Resident Staff in the business that are working at an equivalent level to that of the nominated position but are paid higher to just meet the minimum salary threshold, then the application to sponsor the skilled employee will be flagged down for inconsistencies and red flags. Thus, the exercise of determining the Annual Market Salary Report, and its findings are beneficial for both the business and the staff across the organization.
How is Annual Market Salary Rate Determined
The process of arriving what is the annual market salary rate for the nominated position or role involves the overall consideration of factors such as skill level, location, qualification, experience, and other relevant variables.
Structure of an Annual Market Salary Report
Throughout the document, the report will be illustrating how the specified position and sponsored candidate fit the business and the elements that will validate the salary rate offered to the employee is adequate compensation. It will justify the salary offered by looking at what the business would pay equivalent Australian workers, enterprise agreements or industrial awards, Job Outlook information, and job advertisements. In more detail, it will include sections about:
- Scope of Employment
- Classification and Legislated Minimum Rates in the modern award or EBA (if applicable)
- Comparison and justification with an equivalent Australian Citizen and Permanent Resident (if applicable)
- Data from the Government Job Outlook website, powered by the Australian Bureau of Statistics (ABS)
- Comparison with extremely equivalent job vacancies within the last 6 months in the same location
- Online Salary Reporting Tools
- Published Remuneration Surveys by a reputable organization
- Other relevant references such as written advice from unions or employer associations (if applicable)