Subclass 186 Employer Nomination 2026: What Australian Businesses Must Know Before They Lodge

A 2026 Compliance Guide for Employers and HR Managers Nominating Under the Employer Nomination Scheme

Updated July 2026 | By Augustine & Co. Immigration Lawyers | augustineandco.com

Three Things Most Employer Guides Get Wrong

Most online content about Subclass 186 employer nominations is written for the employee — the sponsored worker planning their permanent residency pathway. Very little of it speaks to employers and HR managers with the precision that decision-making in this space requires. And what does exist frequently contains errors that, acted upon, lead to nominations that fail on avoidable grounds.

Three errors appear consistently:

Augustine & Co. Insight
WRONG — widely published: Employers must meet training benchmarks before nominating for Subclass 186. Training benchmarks were abolished in 2018. The current financial obligation for nominating employers is payment of the Skilling Australians Fund (SAF) levy — not training benchmark compliance. Any guide referencing training benchmarks as a current 186 requirement is working from legislation that no longer exists.

Augustine & Co. Insight
WRONG — widely published: Employers must conduct Labour Market Testing before lodging a Subclass 186 nomination. Labour Market Testing is a Subclass 482 (Skills in Demand) requirement. It does not apply to Subclass 186 TRT or Direct Entry nominations. Conflating the two is a persistent and consequential error.

Augustine & Co. Insight
MISSING — from almost every employer guide: The November 2025 regulatory amendment now makes the employer’s Standard Business Sponsorship (SBS) status directly relevant to the employee’s eligibility for the 186 TRT stream. If an employer’s SBS lapses during the period of employment the employee is relying on, that period does not count toward the mandatory two years. Employers who do not actively manage their SBS renewal are inadvertently creating eligibility problems for their sponsored workers — without knowing it.

This guide from Augustine & Co. Immigration Lawyers sets out what employers and HR managers actually need to know in 2026 — based on current legislation and Department of Home Affairs policy.

You Do Not Need SBS Approval to Lodge a 186 Nomination

This is one of the most widely misunderstood aspects of the Subclass 186 and is worth stating plainly at the outset. Unlike the Subclass 482 Skills in Demand visa — which requires the employer to hold approved Standard Business Sponsor status before sponsoring a worker — Subclass 186 nominations can be lodged by any lawfully and actively operating Australian business without pre-existing SBS approval.

This is a direct pathway to permanent residency that does not require the employer to have gone through the 482 sponsorship approval process. Any business that operates lawfully in Australia and meets the nomination requirements can nominate an employee directly for permanent residence.

Augustine & Co. Insight
If your business has never sponsored a 482 worker and an employee approaches you about sponsoring them for permanent residency, this is not blocked by the absence of SBS approval. The 186 is a separate legal pathway with its own nomination process. What matters is whether your business meets the nomination requirements — not whether you hold a prior sponsorship approval.

What the Department Actually Assesses in a 186 Nomination

A Subclass 186 nomination is assessed by the Department of Home Affairs as a standalone application. The assessment covers:

1. Lawfully and actively operating business

The business must be genuinely operating in Australia at the time of nomination. The Department looks for evidence of active trading — recent Business Activity Statements, payroll records, business registration, and financial activity. Businesses that are newly established, dormant, restructured, or have significantly changed since any prior sponsorship approval face heightened scrutiny.

2. Genuine position

The nominated position must be a genuine, full-time, ongoing role that is consistent with the nominated ANZSCO occupation code and required by the business based on real operational needs. The Department looks for internal consistency between the role as it actually exists and the way it is described in nomination documentation. Where the position has evolved since a prior 482 nomination, those changes need to be documented and explained — not assumed to be invisible.

3. Salary — two independent tests, both must be met

Nominated salary must satisfy two separate legal requirements independently:

The applicable income threshold — Core Skills Income Threshold (CSIT) or Specialist Skills Income Threshold (SSIT) — depending on the stream under which the employee holds or held their 482 visa.

Market salary rate — the salary must reflect what an equivalent Australian worker would be paid for the same role in the same location. This is assessed against industry salary surveys and comparable advertised roles, not just against the threshold.

Passing one test but not the other is a nomination refusal. This is among the most common employer-side failures in 186 nominations, and it is entirely preventable.

4. SAF levy — mandatory, non-refundable, cannot be passed to the employee

The Skilling Australians Fund (SAF) levy is payable by the employer at nomination. The current amounts are AUD $3,000 for businesses with annual turnover below AUD $10 million, and AUD $5,000 for larger businesses. This is a mandatory cost that must be paid before the nomination is lodged. It cannot be charged back to the employee, deducted from wages, or treated as a recruitment cost borne by the applicant. Doing so is a breach of sponsorship obligations.

5. No Labour Market Testing required

Unlike the 482 visa, Subclass 186 TRT and Direct Entry nominations do not require Labour Market Testing. The employer does not need to demonstrate that no suitably qualified Australian candidate was available. This is a significant practical advantage of the 186 pathway over the 482 for employers who want to offer their skilled worker a direct path to permanent residence.

2026 Salary Thresholds: What Changes on 1 July 2026

The Core Skills Income Threshold (CSIT) rises from AUD $76,515 (applicable to 30 June 2026) to AUD $79,499 from 1 July 2026. The Specialist Skills Income Threshold (SSIT) rises from AUD $141,210 to AUD $146,717 over the same transition.

Nominations lodged on or after 1 July 2026 must meet the new thresholds. Both the threshold and the market salary rate must be independently satisfied at lodgement. With ATO data matching now automated and running quarterly, salary discrepancies between payroll records and the nominated figure are flagged before the Department opens the file.

⚠ If Your Employee Earns Between $76,515 and $79,499
A salary review is required before any nomination lodged after 1 July 2026. Plan this through your normal remuneration cycle now. Salary adjustments implemented immediately before lodgement, without supporting remuneration context, attract scrutiny from the Department and from the ATO’s automated matching process.

The November 2025 Amendment: What It Means for Employers Who Previously Held 482 Sponsorship

For employers who have sponsored workers on the Subclass 482 Skills in Demand visa, the November 2025 amendment to regulation 186.227 of the Migration Regulations 1994 has a direct and practical consequence that most employers are not aware of. For a full walkthrough of the current 482 to 186 pathway, see our detailed guide on what most guides get wrong about the 482 to 186 transition.

The amendment clarified that for the 186 TRT stream, the employee’s two-year qualifying period must have been performed while employed by an approved work sponsor. In plain terms: if your Standard Business Sponsorship lapsed at any point during the period of employment your worker is relying on for their 186 eligibility, that period does not count toward their two years — even if they worked continuously and were paid correctly throughout.

SBS approvals require active renewal. Lapses can occur through administrative oversight — a missed renewal notice, a change in business structure, or a period of reduced trading activity that went unaddressed. When this happens, the employee continues working without knowing their qualifying credit has stopped accruing. The first time most employers discover this is when a migration lawyer identifies it at pre-lodgement review — or worse, when the Department identifies it after lodgement.

⚠ Check SBS Renewal Status Now if You Are a 482 Sponsor
If your business currently holds or previously held a Standard Business Sponsorship and you are considering nominating a worker for Subclass 186, verify the continuity of your SBS approval for every period of employment you are relying on. A gap — even a brief administrative one — can disqualify that period from the employee’s qualifying record. This is a standard check in every pre-lodgement review we conduct at Augustine & Co. Immigration Lawyers.

What Happens When Employers Get It Wrong

Employer non-compliance with the Subclass 186 nomination requirements or the employer’s broader sponsorship obligations carries consequences that extend beyond a failed nomination.

Nomination refusal — the most immediate consequence of a non-compliant nomination. The SAF levy is not refunded.

Sponsorship sanctions — the Department can issue formal warnings, suspend or cancel sponsorship approvals, and impose bars on future sponsorship. These affect the employer’s ability to use the 482 visa program as well as the 186.

Civil penalties — significant financial penalties apply to employers who breach sponsorship obligations, including failure to pay the correct salary, passing recruitment costs to employees, or failing to notify the Department of changes.

Employee visa implications — a Skills in Demand visa carries conditions requiring the holder to work only for their approved sponsor. Where an employer’s SBS is cancelled or they are barred due to non-compliance, the sponsored worker may no longer be able to satisfy their visa conditions, placing their visa status at risk. This is a direct and serious consequence that flows from the employer’s compliance record to the employee’s right to remain in Australia.

2026 Processing Times and the Accredited Sponsor Advantage

TRT stream applications are currently taking approximately 13 months at the 50th percentile and 18 months at the 90th percentile. For employers who want to retain a valued team member without an extended period of uncertainty, the processing timeline is a material business consideration.

One option available to employers that most guides do not explain is the Accredited Sponsor designation. Employers who hold Accredited Sponsor status receive priority processing under Ministerial Direction No. 105 — meaning their employees’ 186 applications are assessed ahead of standard applications. For businesses with ongoing skilled migration needs and a track record of compliance, Accredited Sponsor status is worth assessing.

The single most effective way to minimise processing time for any nomination is to lodge a complete, decision-ready application. Nominations that attract requests for further information from the Department consistently take longer than those that do not.

Augustine & Co. Insight
The most common pattern in employer-side nomination failures is not deliberate non-compliance. It is inattention — salary reviews that were not done, SBS renewals that were missed, position descriptions that were not updated when the role evolved. A pre-lodgement compliance review identifies all of these before they become refusals or sanctions. It is the most cost-effective step an employer can take in the entire nomination process.

Why Employers and HR Managers Choose Augustine & Co. Immigration Lawyers

Employer nominations under Subclass 186 involve compliance obligations that span payroll, corporate structure, position management, and the ongoing SBS framework — not just the visa application itself. Getting this right requires legal advice that understands the employer’s position as much as the employee’s.

Augustine & Co. Immigration Lawyers is a specialist Australian immigration law firm. Lawyers, not agents. Our immigration lawyers in Melbourne act for employers and HR teams nationally, conducting pre-lodgement compliance reviews as standard practice — checking SBS status, salary compliance against current and upcoming thresholds, ATO payroll alignment, and position description consistency before anything is lodged.

Request an Employer Nomination Readiness Assessment
Before you lodge, let us review your nomination. We check SBS renewal status, salary compliance against the current and July 2026 thresholds, ATO data alignment, and position genuineness — so your nomination is right before it goes in. Call +61 3 7020 6514 or book a consultation.

Frequently Asked Questions

Does my business need to be an approved Standard Business Sponsor to lodge a Subclass 186 nomination?

No. Unlike the Subclass 482 Skills in Demand visa, Subclass 186 nominations do not require the employer to hold pre-existing Standard Business Sponsor approval. Any lawfully and actively operating Australian business can nominate directly. SBS status is relevant to the employee’s qualifying work history under the TRT stream — not to the employer’s right to nominate.

Do we need to conduct Labour Market Testing for a Subclass 186 nomination?

No. Labour Market Testing is a Subclass 482 requirement. It does not apply to Subclass 186 TRT or Direct Entry nominations. This is one of the most commonly repeated errors in online employer guides on this topic.

What happened to training benchmarks for the Subclass 186?

Training benchmarks were abolished in 2018 and replaced by the Skilling Australians Fund (SAF) levy. Any guide referencing training benchmarks as a current Subclass 186 requirement is working from legislation that no longer applies. The current employer financial obligation is payment of the SAF levy — AUD $3,000 for businesses with annual turnover below AUD $10 million, and AUD $5,000 for larger businesses.

How does the November 2025 regulatory change affect employers?

The November 2025 amendment to regulation 186.227 means that any period during which your Standard Business Sponsorship had lapsed does not count toward your employee’s TRT qualifying period. Employers who do not actively manage their SBS renewal may be inadvertently reducing their employee’s qualifying employment record. SBS renewal management is now a direct employer obligation with consequences for the employee’s 186 eligibility.

What salary must we pay the nominated employee?

The nominated salary must independently satisfy two requirements: the applicable income threshold (CSIT or SSIT, with increases from 1 July 2026) and the market salary rate for the occupation and location. Both tests must be met — satisfying one but not the other is a nomination refusal. These are assessed separately and both must be documented.

How long will the Subclass 186 nomination and visa take to process?

TRT stream applications are currently taking approximately 13 months at the 50th percentile and 18 months at the 90th percentile. Employers who hold Accredited Sponsor status receive priority processing under Ministerial Direction No. 105. A complete, decision-ready nomination lodged with all required documents processes faster than one that attracts requests for further information.

What can the Department do if we breach our sponsorship obligations?

The Department can issue formal warnings, suspend or cancel sponsorship approvals, bar the employer from future sponsorships, and impose significant civil penalties. Beyond direct sanctions on the employer, a Skills in Demand visa requires the holder to work only for an approved sponsor — so where an employer’s SBS is cancelled or they are barred, the employee may no longer be able to satisfy their visa conditions. Employer compliance is not a back-office matter. It directly affects the lawful status of every sponsored worker.

Get Your Nomination Right Before You Lodge

Subclass 186 employer nominations fail not because the employee is ineligible, but because the nomination was not built correctly. Training benchmarks that no longer exist, LMT that was never required, salary figures that satisfy the threshold but not the market rate, and SBS lapses that quietly erase months of qualifying employment — all of these are identifiable before lodgement. None of them need to result in a refusal.

Book an employer nomination readiness assessment or speak with one of our immigration lawyers about your specific circumstances. Call +61 3 7020 6514 or visit augustineandco.com.

Augustine & Co. Immigration Lawyers | Level 11, 456 Lonsdale Street, Melbourne VIC 3000 | +61 3 7020 6514 | augustineandco.com

This article provides general legal information only and does not constitute legal advice. Information reflects the Migration Regulations 1994 as in force on 1 April 2026 and publicly available Department of Home Affairs guidance as at March 2026. Seek specific advice from a registered migration agent or Australian legal practitioner before taking action.