New migration costs and requirements: What employers should be planning for

The Australian Government has increased most Visa Application Charges (VAC) by 25 per cent from 1 July 2026, marking one of the most substantial increases to migration costs in recent years. For employers that rely on skilled migrants, the change immediately increases the cost of accessing international talent. While the increase itself is clear, the way it emerged has raised broader questions. The 25 per cent uplift was not expressly identified in the 2026-27 Budget measures, but instead only became apparent when the Home Affairs Legislation Amendment (2026 Measures No. 1) Regulations 2026 were made and came into effect on 1 July 2026. This highlights a separate but related issue - how such changes operate in practice, and where risks may arise for employers and visa holders.

While the increase may be viewed as a straightforward fee adjustment, it also arrives amid broader changes to Australia’s migration system. Recent reforms continue to affect how employers access skilled workers and reflect a growing focus on ensuring migration supports Australia’s labour market and economic objectives while maintaining program integrity.

For employers, this raises a practical question: how will rising migration costs affect workforce planning, recruitment decisions and long-term talent strategies?

What does the increase tell us about the future of Australia’s migration policy?

The fee increase is best understood as part of a broader reform agenda. Australia remains committed to skilled migration, but recent policy changes point to a more targeted approach that seeks to balance access to international talent with labour market needs, economic priorities and program integrity.

In that context, the increase is not simply a revenue measure. It signals a migration system that is becoming more selective, more regulated, and more costly to access, and reinforces the Government’s focus on aligning migration with efforts to address Australia’s workforce skill shortages.

For employers, this trend is important because it suggests migration policies will continue to evolve. While the specific changes may vary, the overall direction points to a migration framework that requires greater planning, stronger compliance, and clearer alignment between migration strategies and business needs.

The growing cost of accessing international talent

For employers, application costs represent just one component of a migration system that has become progressively more expensive and complex.

The Core Skills Income Threshold also increased on 1 July 2026 to $79,423, raising the minimum salary requirements for many employer-sponsored visa pathways. When combined with higher VAC and existing sponsorship-related costs, the overall investment required to recruit and retain sponsored workers continues to rise.

The impact will vary between organisations. For employers sponsoring only a small number of workers, the additional costs may be relatively minor. However, for employers that rely on ongoing sponsorship of workers to address skill shortages, those costs can accumulate quickly and become a more significant workforce planning issue.

This is particularly relevant in sectors, e.g. healthcare, hospitality and higher education, that continue to experience skill shortages and rely heavily on international talent pipelines. For these employers, migration is often not a discretionary workforce option but a critical component of maintaining operational capacity and supporting growth. As costs increase, businesses need to reassess recruitment budgets, sponsorship strategies and workforce priorities to remain competitive in attracting skilled talent.

Who bears the cost? Managing visa costs and clawback risk

Most VACs are payable at the time of visa application lodgement and are distinct from employer costs such as sponsorship lodgement fees and the Skilling Australians Fund (SAF) levy.

As VACs increase, the upfront cost burden on visa applicants becomes more significant. In practice, this may lead to an increase in arrangements where employers pay VAC and related costs upfront and seek repayment from sponsored workers over time.

These arrangements can create compliance risks, particularly where they result in costs being transferred to visa holders in circumstances where this is not permitted by law, such as requiring workers to repay the SAF levy. Risks may also arise where arrangements are informal or not clearly documented. Employers should ensure any cost recovery arrangements are lawful, transparent and appropriately documented.

The implications extend beyond recruitment budgets

As the cost of sponsorship increases, employers may place greater emphasis on retaining sponsored workers to protect their investment. At the same time, higher VAC may discourage sponsored workers from moving between employers where transfers involve additional time, cost and uncertainty. Over time, rising migration costs are likely to reinforce a greater focus on employee retention and workforce stability.

For some businesses, these changes may also encourage a stronger focus on permanent residency pathways. Supporting eligible sponsored workers to remain in Australia in the long term may become increasingly important as businesses seek to reduce recruitment and visa-related costs and maintain access to critical skills.

Importantly, these cost pressures heighten the need for careful migration compliance. Employers should ensure that any clawback arrangements relating to visa costs do not result in cost-shifting to sponsored workers that is not permitted by law. This is particularly relevant where employers seek to recover costs that are required to be borne by the sponsor, such as the SAF levy. Clear, lawful and well-documented arrangements are critical to managing regulatory risk and ongoing workforce relationships.

Looking ahead

Australia remains committed to skilled migration, but the framework governing access to that talent continues to evolve. The latest visa lodgement fee increase is another reminder that migration is becoming a more strategic workforce consideration that requires planning, investment and ongoing attention.

Employers that regularly review sponsorship arrangements, monitor policy developments and align migration planning with broader workforce objectives will be better placed to respond to change and secure the talent they need.

As migration settings continue to evolve, employers should ensure sponsorship arrangements remain compliant, commercially practical and aligned with broader workforce objectives.

How BDO can help

BDO's migration services team works with employers to understand policy changes, manage sponsorship obligations and develop migration strategies that support workforce planning and business growth.

If the recent changes have caught you by surprise, our team can help you review sponsorship arrangements, understand the impact on your workforce strategy and identify practical options for managing rising migration costs in a changing migration landscape.