On 12 August 2018, the government introduced the new Skilling Australians Fund (SAF) levy, also known as the Nomination Training Contribution Charge (NTCC). Australian employers who sponsor overseas workers must pay this levy. This article will explain the new Skilling Australians Fund (SAF) and how it will affect your business.
What is the Skilling Australians Fund (SAF) Levy?
The purpose of the SAF levy is to require employers that employ foreign workers to contribute to the broader development of skilled Australians so that in the future their employment needs can be met in Australia. The money goes into the Skilling Australians Fund (SAF), a government initiative to grow the number of apprenticeships and traineeships in Australia.
The SAF levy replaces the ‘training benchmark requirements’ employers had to meet previously. Employers will not be subject to both the SAF levy and existing training benchmarks.
Who Needs to Pay For It?
The SAF levy applies to any Australian employer who sponsors an employee under the:
- Temporary Skill Shortage (TSS) visa 482 or Employer Nomination Scheme (ENS) visa 186; and
- Regional Sponsored Migration Scheme (RSMS) visa 187.
The employer needs to pay the levy and cannot be transferred to the employee.
How Much is It?
The cost depends on:
- the sponsoring business’ turnover in the 12 months before lodging it; and
- how long the overseas worker remains in Australia.
The table below indicates the cost for small and larger businesses employing foreign workers under either the TSS, ENS and RSMS visas. For TSS visa sponsors, the levy must be paid annually. This means that the total cost to the employer will depend on how long they intend to sponsor the foreign worker in Australia.
|Business size||TSS visa||ENS / RSMS visas|
|Small (annual turnover of less than $10 million)||$1,200 per year and per worker||$3,000 one-off|
|Other businesses (annual turnover of $10 million or more)||$1,800 per year and per worker||$5,000 one-off|
Is the Amount Capped?
Yes, the SAF fee is capped for employers. For the financial year ending 30 June 2018, the capped limit was:
- $8,000 for the TSS visas (regardless of the occupation list); and
- $5,500 for the ENS/RSMS visas.
It’s likely that the capped amount for future financial years will be similar. The amount is calculated by the Government annually using a specific formula.
Are There Any Exemptions?
There are no exemptions for the SAF levy except for religious workers nominated under the Labour Agreement streams for the TSS or ENS visas. For all other workers nominated under a Labour Agreement, the employer must pay the SAF levy.
When Does It Need to Be Paid?
The SAF levy needs to be paid in full at the time you lodge a nomination application. This includes where a nomination application is being lodged to allow a TSS visa holder to change employers or their occupation with the same employer. Employers can nominate how many years they intend to sponsor the applicant for and calculate their SAF levy accordingly.
Is It Tax Deductible?
Yes, SAF levy payments are tax deductible.
Is It Refundable?
The SAF levy can be refunded in some cases. The Migration Amendment (Skilling Australians Fund) Regulations 2018 outlines the scenarios in which a refund may be appropriate. These scenarios include when:
- the nomination is withdrawn because the sponsorship application was withdrawn or refused;
- the sponsorship and visa applications are approved, but the overseas skilled worker does not arrive or commence employment with the employer;
- the sponsorship and nomination application is approved, but the visa application is refused on health or character grounds;
- an employee (TSS 482 holder) leaves their sponsor within 12 months of commencing their employment. In this situation, the employer may submit a written request to the Department of Immigration requesting a SAF refund. The refund will generally be issued for the remaining unused period. However, this does not apply to ENS or RSMS holders who leave their employer within the first 12 months of employment.
What About Current Sponsors?
The SAF levy does not apply to employers who lodged nomination applications with the Department of Home Affairs before 12 August 2018.
If you are a business sponsoring workers from overseas under the Temporary Skill Shortage (TSS) or Employer Nomination Scheme (ENS) and Regional Skilled Migration Scheme (RSMS), then the SAF levy applies to you. You need to pay the government either an annual fee for your workers under a TSS visa or a one-off fee for your workers under the ENS/RSMS visa. The amount you need to pay will depend on the turnover of your business. However, this only applies to employers who lodged a nomination application on or before 12 August 2018.
If you have any questions about the SAF levy or obtaining a visa, you can contact LegalVision’s immigration lawyers on 1300 544 755 or fill out the form on this page.
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