Changes to the Skilled Worker route in the UK: assessment of salary

The Home Office is introducing a significant change to the way in which Skilled Worker salaries are assessed. This change applies to Certificates of Sponsorship assigned on or after 9 April 2025.

What do the new Rules say?

Monies paid by a Skilled Worker migrant in the form of a salary sacrifice, loan or an investment in the sponsor’s business will be deducted from their salary when assessing whether they meet the minimum salary threshold. For calculating the salary, the deductions will be averaged over the length of time the worker is being sponsored for.

Why has this change been made?

In the Explanatory Memorandum, the Home Office clarifies that these changes are being made:

• for consistency with how paid allowances for the same purposes are treated,
• to mitigate against sponsorship costs being passed on to applicants, and
• to close an unintended loophole whereby applicants could effectively pay towards their own salary through investing in their sponsor’s business.

What does this mean in practice?

For Certificates of Sponsorship issued on or after 9 April 2025, a worker’s salary must meet the required salary thresholds after deducting the relevant payments by the worker to the sponsor. This includes repayments of loans made to the applicant in relation to immigration costs, although restrictions against passing on certain immigration costs (e.g. Certificate of Sponsorship, Immigration Skills Charge) to sponsored workers remain in place.

We recommend employers review their current and prospective sponsored workers’ salaries to check they meet the new requirements. Clawback agreements between employers and sponsored workers will also need to be amended in line with this change. If you require any assistance or further clarification, please do not hesitate to contact us.

We expect the Home Office will issue guidance to provide clarification on these changes in due course. We will monitor this closely and provide an update once new information becomes available.
 

Author: Elektra Clark