Summary
- Most new Skilled Worker applications require at least £41,700 or the full occupation going rate, whichever is higher.
- Lower thresholds only apply where the worker or role meets a specific salary option.
- Employers should budget for salary, Home Office fees and ongoing sponsor compliance costs.
- This guide explains Skilled Worker salary thresholds and sponsorship costs for UK employers.
- LegalVision’s lawyers specialise in advising clients on UK immigration sponsorship.
Tips for Businesses
Before making an offer, confirm the correct occupation code, salary threshold and going rate. Check whether any lower salary option applies and calculate sponsor fees for the full visa period. Record the guaranteed salary clearly in the employment contract. Speak to an immigration lawyers at LegalVision about assessing salary requirements and sponsorship costs before hiring.
On this page
- What Salary Do You Need to Pay a Skilled Worker?
- When Can You Pay a Skilled Worker Less Than £41,700?
- What Payments Count Towards the Skilled Worker Salary Threshold?
- How Do the Skilled Worker Salary Rules Apply to Part-Time Roles?
- Do Existing Skilled Workers Have Different Salary Thresholds?
- What Does It Cost to Sponsor a Skilled Worker?
- When Do You Pay the Immigration Skills Charge?
- Who Pays the Skilled Worker Visa and Immigration Health Surcharge?
- What Sponsorship Duties Continue After the Worker Starts?
- Why Should You Budget for Sponsorship Compliance?
- Key Takeaways
- Frequently Asked Questions
If you want to sponsor a worker under the Skilled Worker route, you need to understand both the minimum salary requirements and the wider cost of sponsorship. Those rules sit on top of the general considerations that apply when hiring workers from overseas. For most new Skilled Worker applications, you must pay at least £41,700 per year or 100% of the going rate for the worker’s occupation code, whichever is higher. Lower salary thresholds can apply in specific circumstances, including for new entrants, some PhD holders, roles on the Immigration Salary List and certain workers first sponsored before 4 April 2024. This article explains how the Skilled Worker salary rules work, when lower thresholds may apply and what your business should budget before making an offer.
What Salary Do You Need to Pay a Skilled Worker?
Under the standard Skilled Worker salary option, you must normally pay at least £41,700 per year and 100% of the going rate for the relevant occupation code. You must satisfy both tests. This means you should treat £41,700 as the minimum starting point rather than the salary that automatically applies to every sponsored role.
The Home Office sets going rates using SOC 2020 occupation codes. For most occupations, it calculates those rates using a 37.5-hour working week. You should identify the correct occupation code before deciding whether the proposed salary meets the Skilled Worker requirements. Each code carries its own going rate.
The occupation code must accurately reflect the work the employee will perform. You should not select a different code simply because it carries a lower going rate. Using an inaccurate occupation code can create problems with the application and put your sponsorship compliance at risk. If the worker will work more than 37.5 hours per week, you may also need to increase the salary to satisfy the applicable going rate.
When Can You Pay a Skilled Worker Less Than £41,700?
You can only pay below the usual £41,700 threshold where a specific Skilled Worker salary exception applies. These exceptions do not apply automatically. You need to confirm that the worker or the role satisfies the relevant requirements before relying on a lower threshold.
The main exceptions include:
- new entrants: at least £33,400 and 70% of the going rate;
- jobs on the Immigration Salary List: at least £33,400, although the full going rate will usually still apply;
- workers with a relevant PhD: at least £37,500 and 90% of the going rate; and
- workers with a relevant STEM PhD: at least £33,400 and 80% of the going rate.
Separate salary rules apply to certain health and education roles. You should check the rules for the specific occupation before making an offer.
Who Qualifies as a New Entrant?
New entrant status can reduce the salary your business needs to pay, but a worker does not qualify simply because they are making their first Skilled Worker application.
A worker may qualify as a new entrant if they:
- are under 26;
- currently hold, or recently held, Student permission;
- currently hold a Graduate visa; or
- are working towards a recognised professional qualification, registration or chartered status.
A four-year limit will also normally apply to new entrant status. Time that the worker has already spent on the Graduate route can count towards this period. You should therefore check the worker’s immigration history before relying on the new entrant salary threshold.
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What Payments Count Towards the Skilled Worker Salary Threshold?
You should focus on the worker’s guaranteed basic gross pay when assessing whether a salary meets the Skilled Worker threshold.
A high overall remuneration package will not necessarily satisfy the rules if too much of the package consists of payments that the Home Office excludes.
When Can Allowances Count?
Guaranteed allowances can count in limited circumstances where you treat them in the same way as basic pay for tax, pension and National Insurance purposes. London weighting will usually meet this requirement.
However, you cannot normally rely on:
- one-off bonuses;
- overtime payments;
- shift premiums;
- benefits in kind, including accommodation; or
- amounts you deduct for business costs, immigration costs or investment in the business.
The Home Office will only count £38,700 towards the general salary threshold. The package therefore does not satisfy the £41,700 requirement.
Before you make an offer, specify the guaranteed salary clearly in the employment contract. Keep discretionary bonuses and other payments separate so you can easily identify the salary figure that counts for sponsorship purposes.
If the worker uses a salary sacrifice arrangement, check how the reduced salary affects the Skilled Worker requirements before relying on the headline remuneration figure.
How Do the Skilled Worker Salary Rules Apply to Part-Time Roles?
Part-time sponsorship requires careful salary planning because the general salary threshold does not reduce simply because the worker works fewer hours. If you sponsor a worker for three days per week, they must still normally receive at least £41,700 under the general salary threshold.
The going rate works differently. You can normally pro-rate the going rate against the weekly hours you record on the certificate of sponsorship.
However, the worker would still need to satisfy the separate £41,700 general salary threshold unless an exception applies. This makes many genuinely part-time roles difficult to sponsor. Before advertising a part-time role for sponsorship, you should confirm that your budget can support the required guaranteed salary.
What Happens if the Worker Works Long Hours?
Different rules apply where the worker works longer hours. When you test the salary against the general threshold, you can only count salary attributable to the first 48 hours per week. The Home Office does not apply the same 48-hour cap when it assesses the going rate. You must use the worker’s full working hours for that calculation. You should therefore check both tests carefully if the role involves long or unusual working hours.
You should also determine whether you need to report the change through the Sponsorship Management System. Do not leave the sponsorship record unchanged where the worker’s actual employment arrangements have materially changed. Keeping accurate employment records and reviewing proposed changes before they take effect can help you identify sponsorship issues early.
Do Existing Skilled Workers Have Different Salary Thresholds?
Some existing Skilled Workers can benefit from transitional salary rules. You should check the worker’s immigration history before applying the salary thresholds that normally apply to new Skilled Worker applications.
Transitional rules may apply where the worker’s first Skilled Worker or qualifying Tier 2 certificate of sponsorship was issued before 4 April 2024 and the worker has continued to hold relevant immigration permission. The standard transitional salary threshold is £31,300 together with the applicable lower going rate. Other salary discounts may also apply depending on the worker’s circumstances.
The difference can materially affect your employment costs. You should ask for details of the worker’s previous certificates of sponsorship before treating an extension or change of employment in the same way as a new Skilled Worker application.
What Does It Cost to Sponsor a Skilled Worker?
Salary will usually represent your largest ongoing expense, but it is not the only cost you need to budget for. If your business does not already hold a Worker sponsor licence, you will first need to work through the sponsor licence application process. You will then usually need to pay a certificate of sponsorship fee and the Immigration Skills Charge for each Skilled Worker you sponsor.
| Cost | Small or charitable sponsor | Medium or large sponsor | When it applies |
|---|---|---|---|
| Worker sponsor licence | £611 | £1,682 | If your business does not already hold a Worker sponsor licence |
| Certificate of sponsorship | £525 | £525 | When you assign a Skilled Worker certificate |
| Immigration Skills Charge, first 12 months | £480 | £1,320 | For most Skilled Worker sponsorships unless an exemption applies |
| Immigration Skills Charge, each additional 6 months | £240 | £660 | For each additional 6-month period |
You should assess these costs across the full sponsorship period rather than treating them as a single administrative fee. The Immigration Skills Charge increases with the length of the certificate. Sponsoring a worker for a longer period therefore creates a larger upfront expense.
You cannot automatically recover every sponsorship cost from the worker. The Home Office restricts sponsors from passing certain costs on to sponsored workers. Trying to recover a prohibited sponsorship cost can put your sponsor licence at risk. You should confirm which costs your business must absorb before agreeing any repayment arrangements with the worker.
“Businesses budget for the salary and then get caught by the rest. The Immigration Skills Charge is payable in full the day you assign the certificate, so a first three year hire can cost you over £6,000 in sponsor fees before the worker has done a day's work”
When Do You Pay the Immigration Skills Charge?
You pay the full Immigration Skills Charge when you assign the certificate of sponsorship. You do not spread this cost across the sponsorship period. Your business therefore pays the full amount when you make the hire. The Home Office calculates the charge according to the length of the certificate. A longer certificate therefore means a higher upfront cost.
Some Skilled Worker sponsorships do not attract the Immigration Skills Charge. You do not need to pay the charge where a worker switches into the Skilled Worker route from a Student or Graduate visa from within the UK. The Home Office also exempts certain science, research and higher education occupation codes. You should check whether an exemption applies before including the full charge in your recruitment budget.
Who Pays the Skilled Worker Visa and Immigration Health Surcharge?
The sponsorship costs above only cover the sponsor’s side of the process. The worker normally pays their own visa application fee and Immigration Health Surcharge unless your business agrees to cover those costs.
You should decide whether your business will cover any worker-side immigration costs before you advertise the role or begin salary negotiations. This gives you a clearer picture of the total recruitment budget and reduces the risk of unexpected costs arising after you have selected a candidate.
What Sponsorship Duties Continue After the Worker Starts?
Your responsibilities do not end once the worker receives their visa. You must continue meeting your sponsor duties throughout the employment relationship and need to report relevant changes through the Sponsorship Management System.
You should make sure the people responsible for HR, payroll and sponsorship understand which changes trigger reporting duties.
Your business must also complete appropriate right to work checks for every worker, not only employees you sponsor. You should build these responsibilities into your HR and recruitment processes rather than treating sponsorship as a one-off visa application.
Planning to sponsor a worker from overseas? Download our free guide to sponsor licences, visa routes and your ongoing sponsor duties.
Why Should You Budget for Sponsorship Compliance?
The direct Home Office fees represent only part of the true cost of sponsorship. Your business also needs appropriate systems, records and staff time to manage its sponsor duties.
Failing to meet your sponsor duties can create much greater costs than the application fees themselves. The Home Office can suspend or revoke your sponsor licence if you fail to meet your obligations. This can prevent you from sponsoring new workers and affect employees you already sponsor. It can also create significant recruitment and workforce disruption.
Key Takeaways
For most new Skilled Worker applications, you must pay at least £41,700 or the full going rate for the occupation, whichever is higher, so confirm the correct SOC 2020 occupation code before you set the salary or make an offer. Only guaranteed basic pay counts towards the threshold, which means bonuses, overtime and benefits in kind will not close a gap. Lower thresholds are available, but only where the worker or the role meets a specific exception. Budget for the sponsorship fees and the ongoing compliance costs alongside the salary, not after it.
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Frequently Asked Questions
Do you need a sponsor licence for every overseas worker?
No. You do not usually need to sponsor Irish citizens, people with indefinite leave to remain or workers with settled or pre-settled status under the EU Settlement Scheme.
What systems do you need before applying for a sponsor licence?
Before applying, you should have systems that let you monitor sponsored workers and people who can manage your sponsorship duties. Your business needs these systems to meet the eligibility requirements for a sponsor licence.
Who should manage sponsorship duties in your business?
You can appoint an Authorising Officer, Key Contact and Level 1 or Level 2 users to manage the Sponsorship Management System. However, your business remains responsible for meeting its sponsor duties.
When should you complete a right to work check?
You should complete the appropriate right to work check before the worker starts employment. The check should form part of your recruitment and onboarding process, and you should keep evidence of the check.
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