Australian immigration policy, in common with the US and Canada, has increased the emphasis on skill based selection criteria. A key premise of this policy is that skilled immigrants are more employable and can add to the productive capacity of the economy. However, this e¤ect will be diminished if immigrants are working in occupations that fail to utilise their skills. We examine the extent of overeducation for recently arrived immigrants to Australia. We …nd that they are more likely to be overeducated than the native population, even if they enter on skill based visas.Overeducation is greatest for immigrants from Non-English speaking backgrounds (NESB) and appears to generate lower returns to education. The incidence of overeducation is signi…cantly reduced for all immigrants if they enter with visas that are a result of a job o¤er from an employer in the recipient country.