Under Australian migration law, “annual earnings” are defined within the context of visa eligibility and employer-sponsored migration schemes. A key legislative framework relevant to this definition is the Migration Regulations 1994 (Cth), which outlines that “annual earnings” include the employee’s wage or salary and any monetary benefits paid to the employee. However, non-monetary benefits, unless easily convertible to cash, are generally excluded. Specifically, the Migration (IMMI 18/033: Specification of Income Threshold and Annual Earnings) Instrument 2018 provides relevant regulations on the calculation of annual earnings.

Key Points on Annual Earnings:

1. Monetary Components: Annual earnings typically include the base salary or wages and other monetary payments such as allowances and bonuses, provided they are guaranteed and a regular part of the employment contract.
2. Non-Monetary Benefits: Certain non-monetary benefits like accommodation or private use of a company car are not included unless their value can be converted to cash.
3. Superannuation: Superannuation contributions made by an employer are generally not considered part of annual earnings unless the visa instrument explicitly includes them.

Supporting Case Law:

1. DFJ20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1034
   This case clarified the components that form part of an employee’s “earnings” for the purposes of the Temporary Skill Shortage (TSS) visa program. The Federal Court held that earnings include payments the employee is entitled to as a term of employment, including salary sacrifice arrangements but excluding discretionary bonuses.
2. Minister for Immigration and Citizenship v Li [2013] HCA 18
   While this case is primarily known for its principles of judicial review, it tangentially involved the consideration of earnings in the context of migration law, emphasizing the need for decision-makers to take into account all contractual obligations affecting an employee’s remuneration when assessing annual earnings.
3. Cowie v Minister for Immigration and Citizenship [2008] AATA 887
   This decision before the Administrative Appeals Tribunal (AAT) discussed the inclusion of fringe benefits in “earnings” under the Employer Nomination Scheme (ENS), stressing that only benefits easily convertible to cash could be included in the calculation of annual earnings.

These cases demonstrate the judicial interpretation of what constitutes “annual earnings” under the Migration Act and Regulations, which focuses heavily on the structure and certainty of payments under employment contracts.

If you would like more information on annual earnings or any information about the TSS program please contact us and one of our experts will get in touch with you the soonest possible.