What Is the Cost to Sponsor an Employee in Australia? What Small Businesses Need to Know

Sponsoring an overseas worker can be a smart way to fill skills gaps and grow your team. For many small businesses in Australia, accessing global talent helps you compete and scale faster.

It’s also normal to have questions about costs, timing and legal obligations. The process can look complex at first glance, but with a clear plan-and the right professional support-you can sponsor a worker in a compliant and cost‑effective way.

In this guide, we’ll explain how sponsorship works for employers, break down the key fees (including the Skilling Australians Fund levy), outline the step‑by‑step process, and cover the main legal and workplace obligations you’ll need to meet.

How Sponsorship Works For Australian Employers

When you “sponsor” a worker, you are endorsing a skilled overseas candidate to fill a genuine position in your business and taking on certain obligations to the Australian Government and the employee.

The most common employer‑sponsored pathway is the Temporary Skill Shortage (TSS) visa (subclass 482). There are other visas and pathways, but the TSS is the typical route for small businesses filling ongoing skills shortages.

As an approved sponsor, you’re confirming that:

• Your business is lawfully operating in Australia.
• The role is genuine and on an eligible skilled occupation list (or otherwise eligible under the relevant visa rules).
• You will meet all sponsor obligations, including paying at least the “market salary rate” for the role and complying with workplace laws.

Important note: Sprintlaw is not a migration agency. You’ll usually work with a registered migration agent for the visa and nomination process. Our team helps with the employment, contracts, workplace policies and business structure side so your legal setup aligns with your sponsorship obligations.

What Does It Cost To Sponsor An Employee?

Exact costs depend on your business size, the visa stream and the length of stay you’re nominating. Below are the common government fees and typical professional costs as at 2024.

Core Government Fees

• Sponsorship Application Fee (Standard Business Sponsor): $420 (one‑off, payable to the Department of Home Affairs).
• Nomination Fee: $330 per nomination (paid when you nominate the specific position and worker).
• Skilling Australians Fund (SAF) Levy: This is usually the largest employer cost and is mandatory for each nomination:
  • Turnover under $10 million: $1,200 per year of the proposed visa period.
  • Turnover $10 million or more: $1,800 per year.
  For example, a 2‑year nomination for a small business (under $10 million turnover) will generally attract a SAF levy of $2,400.
• Visa Application Charge: Typically paid by the visa applicant (some businesses choose to reimburse). For the TSS visa, the base charge is usually in the range of ~$1,455–$3,035 depending on the stream and applicant factors.

Common Professional Costs

• Migration Agent/Legal Fees (Migration): Fees vary by complexity and number of applicants. Many small businesses engage a registered migration agent to manage sponsor, nomination and visa steps together.
• Employment/Workplace Legal Setup: It’s common to update or put in place an Employment Contract, workplace policies and other documents to meet sponsor obligations and Fair Work requirements.

Other Costs To Plan For

• Labour Market Testing (advertising) costs: Depending on the role, you may need to advertise locally and retain evidence of genuine recruitment efforts.
• Market salary rate and on‑costs: You must pay at least the market salary rate for the role, plus usual on‑costs (superannuation, payroll tax where applicable, leave entitlements under the relevant award or agreement, etc.).
• Internal compliance time: Maintaining sponsor records and reporting certain changes to Home Affairs takes time-factor this into resourcing.

Tip: Costs and fees can change. Always confirm current Department of Home Affairs charges and speak with your accountant about budgeting and any tax implications of sponsorship‑related expenses.

Step‑By‑Step: From Sponsor Approval To Hiring

Here’s the typical pathway for a small business looking to sponsor a worker under the TSS visa program.

1) Check You Can Sponsor

Confirm your business is lawfully operating and has a genuine skills need. You’ll need core details ready (ABN, business name and business activity evidence). If you’re not familiar with your ABN setup or whether an ABN suits your current operations, this guide on the advantages and disadvantages of having an ABN is a helpful refresher.

2) Apply To Become A Standard Business Sponsor

Submit your sponsorship application and pay the sponsorship fee. If approved, most businesses receive sponsor approval for up to five years.

3) Nominate The Position

You’ll nominate the role (linked to an eligible occupation), demonstrate it’s genuine and meets salary benchmarks, and pay the nomination fee and SAF levy.

4) The Candidate Applies For The Visa

Once the nomination is lodged (or approved, depending on strategy), your candidate applies for the visa. You’ll usually provide an offer of employment and a compliant Employment Contract reflecting the nominated role and market salary.

Important: For most TSS arrangements, the worker must be your direct employee (not an independent contractor). Avoid “contractor” setups that don’t align with sponsorship rules or Australian employment law.

5) Meet Ongoing Sponsor Obligations

After the visa is granted, you must continue to meet sponsorship and workplace obligations (record‑keeping, reporting certain changes, and ensuring pay and conditions remain compliant). Many employers formalise expectations with clear workplace policies-our Staff Handbook Package is a common way to roll out a Code of Conduct, leave policies and WHS rules in one place.

What Laws And Obligations Apply To Sponsors?

Sponsoring a worker touches multiple areas of Australian law. Here are the key categories to have on your radar.

Migration Law (Department of Home Affairs)

Each visa has specific rules you must meet. For sponsor obligations, expect record‑keeping requirements, market salary rate benchmarks, reporting obligations (for example, if the employee ceases employment), and the need to ensure the role remains genuine.

Work with a registered migration agent on the migration aspects. We can support the employment and business law side alongside your migration adviser so your documents line up with the visa requirements.

Employment Law (Fair Work System)

Sponsored workers are entitled to the same minimum standards as any other employee in Australia. This includes minimum wage, overtime/penalties where applicable, leave entitlements and compliant termination processes. Many roles are covered by a modern award-if so, you’ll need to ensure your pay and conditions meet or exceed it. If you’re unsure which award applies or how to structure remuneration, specialist award compliance support is a good first step.

Work Health And Safety (WHS)

You must provide a safe workplace and follow WHS duties. This includes training, risk assessments and incident reporting processes appropriate for your industry.

Tax, Superannuation And Payroll

Pay the correct superannuation, withhold PAYG, and meet other payroll obligations. Speak with your accountant about payroll tax in your state or territory and any GST or income tax considerations relevant to your business. If you’re designing new roles or remuneration structures, lock in a compliant approach early.

Privacy And Data Protection

Australia’s Privacy Act 1988 applies to “APP entities,” which generally includes businesses with annual turnover above $3 million (with some exceptions for specific industries and activities). Even if you’re under the threshold, many employers choose to implement a clear Privacy Policy and good data practices-particularly if you handle sensitive information like health data or run HR systems in the cloud.

Record‑Keeping And Reporting

Keep accurate records of employment terms, wages, hours, and any information needed to demonstrate compliance with sponsor obligations. Notify Home Affairs promptly if key details change (for example, if the employee leaves, or there are material role changes).

Essential Legal Documents For Employing A Sponsored Worker

Strong, tailored documents help you meet sponsor obligations and manage day‑to‑day employment risks.

• Employment Contract: Sets out duties, pay, location, hours, confidentiality and termination terms tailored to the nominated role and the applicable award or agreement. A compliant Employment Contract also helps demonstrate market salary rate and lawful conditions.
• Workplace Policies: A Staff Handbook or policy suite (Code of Conduct, leave, WHS, bullying/harassment, IT and social media) sets clear expectations and supports Fair Work compliance. Consider rolling this out via our Staff Handbook Package.
• Privacy Policy: Explains how you collect, store and use personal information and helps embed privacy practices across HR and onboarding. You can get a tailored Privacy Policy that suits your operations.
• Confidentiality And IP Protection: Include strong confidentiality and IP ownership clauses in your Employment Contract. Where you work with third parties or contractors in parallel, use a targeted Non‑Disclosure Agreement.
• Founders And Structure Documents (if you’re a company): If you’re operating as a company or moving from sole trader to company while you scale your team, you may also need to set or update your company governance. This might include a Shareholders Agreement (if you have co‑founders) and, if you’re not yet incorporated, a clean pathway through our Company Set Up service.

Note: For TSS sponsorship, the worker is ordinarily your direct employee. Independent contractor arrangements generally don’t align with TSS requirements, so avoid using contractor agreements for sponsored roles.

Key Takeaways

• The main employer costs to sponsor a worker in Australia include the sponsorship application fee, the nomination fee and the Skilling Australians Fund levy (usually the largest component for small businesses).
• You’ll also need to budget for award‑compliant wages and on‑costs, potential advertising (labour market testing), and internal compliance time-plus professional migration and employment law support.
• Work with a registered migration agent for the visa/nomination process; Sprintlaw supports the employment, workplace and business law setup so your contracts, policies and structure are compliant.
• Expect ongoing obligations: pay at least the market salary rate, keep accurate records and notify Home Affairs of material changes, while meeting Fair Work and WHS requirements.
• Get your foundations right with a tailored Employment Contract, a clear policy suite, and privacy practices; company‑run teams should also consider governance documents like a Shareholders Agreement.
• Fees and rules can change-confirm current Home Affairs charges and speak with your accountant about payroll and tax settings before you proceed.

If you would like a consultation on sponsoring an employee for your small business (employment contracts, policies and structure), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.