The Skilling Australia Fund (SAF) levy is a mandatory fee that employers must pay when sponsoring overseas workers. The levy was introduced to help fund skills training and workforce development for Australians, ensuring that local workers have opportunities to gain qualifications and secure employment in industries experiencing skills shortages.
When does the SAF levy need to be paid?
Employers must pay the SAF levy in full when lodging a nomination application for the following visas:
- Skills in Demand (SID) visa (subclass 482)
- Employer Nomination Scheme (ENS) visa (subclass 186)
- Skilled Employer Sponsored Regional (Provisional) (SESR) visa (subclass 494).
The levy amount is determined by the business's annual turnover:
- small businesses (turnover under $10 million) – $1,200 per year per nominee for temporary visas or $3,000 for permanent visas
- large businesses (turnover of $10 million or more) – $1,800 per year per nominee for temporary visas or $5,000 for permanent visas.
For example, an employer sponsoring a worker for a 4-year 482 SID visa would pay $4,800 (small business) or $7,200 (large business) in total.
When can employers get a refund?
Refunds of the SAF levy (or part of it) are only granted in specific circumstances. The Department may approve a refund if:
- the nomination and visa were approved, but the worker didn't commence work
- the nomination was approved, but the visa was refused due to health or character issues
- the employer withdrew the nomination because of incorrect details affecting the SAF levy calculation (e.g., turnover, employment period)
- the nomination under the labour agreement stream was withdrawn before finalising the agreement
- the nomination was withdrawn because the employer reached the yearly limit or listed the wrong occupation
- a SID or SESR visa holder leaves within 12 months of employment (for visas over 12 months), with refunds given for unused full years of the levy
- the nomination was withdrawn because the sponsorship application was refused or withdrawn
- the employer withdrew the ENS or SESR nomination due to choosing the wrong stream or occupation.
Refunds are strictly limited and generally not available once the nomination has been approved. It is therefore important for employers to carefully review all details before submitting their applications.
When can't employers get a refund?
There are several situations where a refund will not be granted, including if:
- a nomination application is refused
- the nominee resigns or leaves employment after 12 months but before the visa expires
- the employer terminates the nominee's employment before the visa period ends
- the business no longer requires the nominee, but the nomination was not withdrawn before a decision was made
- the nominee is granted permanent residency before the expiry of their SID visa, meaning the employer's sponsorship is no longer required
- the employer makes an error in selecting the visa subclass, leading to a nomination refusal.
It is crucial for employers to fully assess their workforce needs and ensure compliance with all visa and sponsorship obligations before submitting a nomination. Once paid, the SAF levy is generally non-refundable, so businesses should plan carefully.
Key takeaways
- The SAF levy is a mandatory, upfront payment required for the nomination of overseas workers under the SID, ENS and SESR visa streams.
- The amount payable depends on business size and visa type, with higher fees for larger businesses and permanent visa pathways.
- Refunds are only available in specific cases, such as nomination withdrawal, visa refusal due to health or character issues, or if the nominee does not commence work.
- Employers cannot claim a refund if the nominee resigns, is terminated or gains permanent residency before their visa expires.
- Businesses should carefully evaluate their workforce needs before sponsoring a worker to avoid unnecessary financial loss.
By understanding the SAF levy and its refund conditions, employers can make informed decisions when sponsoring overseas workers. Read our article about other visa-related costs employers may be required to pay here and current visa processing times here.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.
