Finding and retaining skilled employees is one of the biggest challenges facing Australian businesses. If you have identified a talented overseas worker who adds value to your organisation, becoming a Standard Business Sponsor may provide a pathway to legally employ and retain that individual in Australia.
While the sponsorship process involves immigration requirements administered by the Department of Home Affairs, businesses must also ensure they maintain accurate financial records, payroll compliance, taxation obligations and employment documentation throughout the process.
Is Your Business Eligible to Become a Sponsor?
To become a Standard Business Sponsor, a business must be legally established and actively operating in Australia. Contrary to common misconceptions, there is no specific minimum turnover requirement. However, businesses must demonstrate that they are genuine trading entities and financially capable of supporting the nominated position.
Documents commonly used to demonstrate business activity include:
- Australian Business Number (ABN) registration
- Business Activity Statements (BAS)
- Income tax returns
- Profit and loss statements
- Business bank statements
- Employment records and invoices
Maintaining accurate accounting records is essential, as these documents may be requested during sponsorship assessments.
Demonstrating a Genuine Need for the Position
Sponsorship is intended to address genuine skill shortages, not simply to retain a worker without a business need. Employers must show that the nominated role is legitimate and necessary for business operations.
When assessing an application, authorities may consider:
- The nature and size of the business
- The business activities being undertaken
- Why the role is required
- The employee’s qualifications and experience
- Whether the occupation is eligible under the relevant skilled migration program
Businesses should ensure job descriptions accurately reflect the duties performed and are supported by genuine operational requirements.
Labour Market Testing Requirements
In many circumstances, employers must undertake Labour Market Testing (LMT) before sponsoring an overseas worker. This generally involves advertising the role and demonstrating that suitably qualified Australian citizens or permanent residents could not be found to fill the position.
Labour Market Testing may require:
- Advertising the position through approved channels
- Retaining evidence of advertisements
- Documenting recruitment outcomes
- Showing why applicants were unsuitable for the role
Failing to satisfy Labour Market Testing requirements can result in nomination applications being refused, making proper documentation critical.
Salary and Payroll Compliance
One of the key obligations for sponsoring employers is ensuring that sponsored workers receive at least the market salary rate for their occupation. Sponsored employees must not be paid less than an equivalent Australian worker performing the same role.
For relevant employer-sponsored visa programs, salary requirements must also satisfy the applicable income thresholds. From 1 July 2026, the Core Skills Income Threshold is AUD $79,423 per annum.
Businesses should ensure:
- Payroll records are accurate
- Payslips are issued correctly
- Superannuation obligations are met
- Employment contracts reflect actual remuneration
- Salary payments align with approved nominations
Proper payroll administration helps reduce compliance risks while supporting visa obligations.
Ongoing Sponsor Obligations
Approval as a sponsor is only the beginning. Employers have continuing responsibilities throughout the sponsorship period and, in some cases, after sponsorship has ended.
Key obligations include:
- Keeping employment and payroll records
- Maintaining equivalent employment conditions
- Ensuring employees work only in their nominated occupation
- Reporting required business or employment changes
- Cooperating with compliance monitoring if requested
Certain changes, including cessation of employment and changes to business structure, must generally be reported within required timeframes. Failure to comply may result in sanctions, fines or restrictions on future sponsorship applications.
The Importance of Accurate Financial Records
Strong financial management plays an important role in sponsorship applications. Businesses should ensure financial statements, payroll records, taxation lodgements and business documentation are current and accurate.
Preparing these records in advance can help demonstrate business viability and support the sponsorship process if requested by migration professionals or government authorities.
Whether you are considering sponsoring an overseas skilled worker or preparing the financial records required to support an application, obtaining professional accounting advice can help ensure compliance with Australian taxation and payroll obligations.
At I DO TAX Accountants, we assist businesses with bookkeeping, payroll, financial reporting, taxation compliance and business record management. If you are exploring employer sponsorship opportunities, speak with our team to ensure your financial records and tax obligations are managed correctly and in accordance with Australian law., speak with a qualified tax professional to ensure your lodgements accurately reflect the applicable ATO requirements and maximise available tax benefits.
Speak with our team today to stay compliant and protect your growing business.