Employer Nomination Scheme (Subclass 186): A Guide For Australian Employers

For Australian businesses looking to retain skilled international employees in the long run, permanent employer sponsorship can be an important part of workforce planning.

The Employer Nomination Scheme visa (Subclass 186) allows eligible skilled workers who are nominated by an Australian employer to live and work in Australia permanently.

It can provide a pathway for:

1. Employees already working in Australia on an employer-sponsored visa through the Temporary Residence Transition Stream; and
2. Eligible skilled workers through the Direct Entry stream.

Here are some of the key considerations employers should understand before proceeding.

What is the Employer Nomination Scheme visa?

The Employer Nomination Scheme visa (or Subclass 186 visa) is a permanent employer-sponsored visa.

Unlike a temporary employer-sponsored visa such as the Skills in Demand Visa (Subclass 482), the 186 allows the worker to remain in Australia permanently once the visa is granted. Eligible visa holders can live, work, and study in Australia indefinitely and may later be able to apply for Australian citizenship if they meet the relevant requirements.

There are two main pathways under the Employer Nomination Scheme:

• Temporary Residence Transition stream
• Direct Entry stream

The appropriate pathway will depend on the employee's circumstances and their relationship with the sponsoring employer.

What is the Temporary Residence Transition Stream?

The Temporary Residence Transition (TRT) stream is particularly relevant to businesses that already employ a sponsored worker in Australia.

Generally, the employee must hold a Subclass 457, Subclass 482, or eligible bridging visa and have completed at least two years of eligible sponsored employment in the three years before applying. The worker must also have an approved nomination from an Australian employer.

Eligible sponsored employment must generally have been:

• Full-time
• Undertaken in Australia
• Completed while holding an eligible visa (usually a primary Subclass 482 visa or Bridging Visa that resulted in the subsequent grant of a primary Subclass 482 visa)
• Undertaken in an occupation the employee was approved to perform

For employers, this means permanent residency requirements are worth considering well before an employee reaches the end of their temporary visa.

What is the Direct Entry stream?

The Direct Entry stream provides another route to permanent employer sponsorship and does not rely on the employee first completing the Temporary Residence Transition pathway.

Under the current requirements, applicants generally need to:

• Be under 45 when they apply (unless an exemption applies)
• Be nominated for an occupation on the Core Skills Occupation List
• Have at least three years of relevant work experience, unless exempt
• Have a positive skills assessment, unless exempt
• Meet the required English language standard
• Meet health and character requirements

The Direct Entry pathway can therefore suit different circumstances to the TRT stream, but employers should assess the occupation, worker's experience and skills-assessment requirements before proceeding.

What does an employer need to do for a Subclass 186 visa?

The Employer Nomination Scheme is an employer-nominated visa.

That means the business has an active role in the process. Employers need to nominate the worker and position and satisfy the requirements applying to that nomination.

For example: under the Temporary Residence Transition stream, the nominating employer must be actively and lawfully operating in Australia, and the employee generally needs to be nominated by the employer that most recently sponsored them to work full-time under their eligible temporary visa.

Employers also need to consider matters such as:

• Whether the proposed position and employee are suitable for the relevant 186 pathway
• Applicable occupation requirements
• Salary and market-rate requirements
• The worker's experience, skills, and qualifications
• Any required registration or licensing
• The supporting evidence required for the nomination

Assessing these issues before the nomination is lodged can help identify potential problems early.

What are the salary requirements for a 186 nomination?

Salary is another important consideration for employers.

For Employer Nomination Scheme nominations, employers generally need to ensure that the proposed salary satisfies the applicable income threshold and reflects the annual market salary rate for the position.

For nominations lodged between 1 July 2026 and 30 June 2027, the Core Skills Income Threshold applying to relevant Subclass 186 nominations is $79,423 per annum (excluding superannuation).

The employer must generally also demonstrate that the employee will not be paid less than the applicable Australian market salary rate.

These thresholds are indexed, so employers should confirm the current requirements at the time a nomination is being prepared.

Do 186 visa applicants need a skills assessment?

That depends on the pathway.

For the Direct Entry stream, most applicants require a positive skills assessment before applying, although exemptions can apply. They generally also need at least three years of relevant work experience.

A skills assessment is not generally required at the time of application for the Temporary Residence Transition Stream, although the Department may request one in some circumstances.

Employers should therefore plan ahead and determine the proposed visa stream early, as it can materially change what the employee needs to prepare.

Can a 482 visa holder transition to a 186 visa?

Yes, this is one of the most important uses of the Employer Nomination Scheme for employers already sponsoring international workers.

Under the Temporary Residence Transition stream, an eligible employee generally needs to have completed two years of eligible sponsored employment during the three years immediately before their application.

Alternatively, they may be eligible under the Direct Entry stream earlier, if they can obtain a positive skills assessment in their occupation, and demonstrate 3 years of experience in their nominated occupation.

For a business that wants to retain a valued employee over the long term, assessing the potential 482-to-186 pathway at an earlier stage can help with workforce planning, retention discussions, and the preparation of relevant employment records.

How is the 186 visa different from the 482 visa?

The biggest difference is the outcome.

The Skills in Demand Visa (Subclass 482) is a temporary employer-sponsored visa, while the Employer Nomination Scheme (Subclass 186) grants permanent residence to an eligible worker.

The 482 can therefore provide a way to recruit or retain a skilled worker temporarily, while the 186 may provide a longer-term pathway for eligible employees.

The two programs are also connected: many employers initially sponsor a worker through the 482 program and later consider the 186 visa once the employee meets the relevant requirements.

However, the appropriate strategy will depend on the worker, occupation, business requirements, commercial considerations, and intended timeframe.

When should employers start planning for a 186 visa?

Ideally, as early as possible if employee retention is key. Employers considering permanent sponsorship should review:

• The intended pathway
  Would the Temporary Residence Transition or Direct Entry stream be most appropriate?
• Employment history
  Has the employee completed the required period of eligible sponsored employment where TRT is being considered?
• Salary
  Are the employee's guaranteed annual earnings appropriate, and do they satisfy 'market salary’ requirements?’
• Skills and experience
  Does the employee need a skills assessment or evidence of relevant work experience?
• Age and English requirements
  Does the employee satisfy the standard requirements or could an exemption potentially apply?
• Long-term workforce plans
  Does permanent sponsorship align with the business's plans for the role and employee?

Looking at these factors early can help employers understand whether the Subclass 186 is a realistic pathway and what needs to happen before an application is prepared.

How Xemplo Legal can help with the Employer Nomination Scheme

Employer-sponsored permanent residency involves both an employer nomination and an individual visa application, with requirements that vary depending on the pathway being used.

Xemplo Legal can help businesses assess what the most appropriate Employer Nomination Scheme pathway would be - including an assessment of the business’ operations, proposed role, and employee circumstances – and guide all parties through the nomination and visa application process.

Our migration team can support employers with:

• Pathway and eligibility assessment
• Employer nomination requirements
• Advice on salary requirements
• Preparation and lodgement of nomination and visa application forms
• Preparation of supporting documentation and submissions
• Holistic advice on transition from temporary employer sponsorship to permanent residency

Considering permanent sponsorship for an employee?

If you are considering retaining an international employee in Australia permanently, a professional assessment can be useful to assess their eligibility and the available pathway before their existing visa approaches expiry.

Talk to Xemplo Legal about your employee and workforce requirements to understand whether the Employer Nomination Scheme (Subclass 186) may be appropriate for your employees, and what your business needs to do next to retained skilled overseas workers.

This article provides general information only and does not constitute legal advice. It does not take into account your specific circumstances and should not be relied on as a substitute for advice tailored to your situation. For advice about your particular circumstances, please contact Xemplo Legal.