Skilled Worker Sponsor Licence: New Rules on Pay and Fees
In This Article
1. Salary Deductions and Investments by Sponsored Workers
2. Further Clarification on Salary Deductions in Sponsor Guidance
3. Call for Examples and Clarification on “Related Organisations”
4. Other Amendments to Guidance – Sponsor Licence Fees and Administrative Costs
5. Sponsor Licence Fees: Broader Restrictions Across All Routes
6. What Counts as Administrative Costs for Sponsor Licences?
7. Contact Our Immigration Barristers
On 9 April 2025, new Immigration Rules under Appendix Skilled Worker came into force.
Further to our article, New Immigration Rules for Skilled Workers: Further Challenges for Self-Sponsorship, the Home Office has updated its guidance for Sponsor Licence holders, including significant changes around investment by sponsored workers, salary deductions, and the payment of sponsor-related fees.
1. Salary Deductions and Investments by Sponsored Workers
The newly updated Skilled Worker caseworker guidance sets out:
Paragraph SW 14.2A sets out how to consider deductions from salaries and money paid by the applicant to the sponsor. Generally, such amounts must be subtracted when considering salaries. This includes (but is not limited to) cases where it appears the applicant is subsidising their own salary or the sponsor’s immigration costs. However, such payments should not be subtracted if both of the following apply:
- the payment is not related to business costs, immigration costs or investment;
- the applicant has genuinely chosen to give up part of their basic pay for additional benefits as part of a salary sacrifice scheme Paragraph SW 14.5(a) sets out a transitional arrangement for Tier 2 (General) migrants.
Their salaries can continue to include allowances, providing all the following conditions are met:
- they are applying to extend with the same sponsor;
- the date of application is before 1 December 2026;
- the allowances are guaranteed;
- the allowances will be paid for the duration of the applicant’s permission (one- off bonuses are not included and cannot be pro-rated);
- the allowances would be paid to a local settled worker in similar circumstances (such as London weighting, even where it is not treated the same as basic gross pay for tax, pension and national insurance purposes).
Where a sponsor has listed these types of allowances, but the transitional arrangement does not apply, the sponsor may be unaware of the rules changes on allowances. You should consider contacting the sponsor to give them the opportunity to amend the salary and allowances package, if this could alter the decision on the application.
This Guidance does not actually give any information on what counts as “money paid by the applicant to the sponsor” so it must be assumed that the reading is the most obvious interpretation of those words – that this means money transferred directly from the Skilled Worker Applicant to the Sponsor, or whatever a ‘related organisation’ might be.
2. Further Clarification on Salary Deductions in Sponsor Guidance
The newly updated 09 April 2025 Workers and Temporary Workers: Sponsor a Skilled Worker Guidance has also been updated in line but offers little more than a repeat of the new rule:
Money paid by the worker to the sponsor or related organisation
SK7.6. When we calculate whether the worker’s salary meets the applicable salary thresholds, we will subtract from the worker’s salary any of the following payments a worker is required to make to you (the sponsor) or to a related organisation:
- deductions from the worker’s salary related to business costs, immigration costs or investment in your (or a related) organisation;
- repayments of loans made to the worker related to business costs, immigration costs or investment in your (or a related) organisation;
- investment in your (or a related) organisation.
SK7.7 When making this calculation, we will average any such deductions over the period the worker is being sponsored for, as stated on their CoS.
SK7.8 Money will not be subtracted where the payment is not related to business costs, immigration costs or investment, but is an additional benefit offer which the worker has a genuine choice whether to take up, such as a salary sacrifice arrangement. However, you must ensure that any such arrangement does not result in the worker’s pay falling below National Minimum Wage.
3. Call for Examples and Clarification on “Related Organisations”
Hopefully examples will be added to the Guidance to illustrate the averaging of deductions, but in the absence of such information, it is assumed that a £50k investment into a company offering sponsorship for 5 years equates to an average of £10k per year of sponsorship, so the sponsored salary would have to be at least £10k over the general threshold / going rate for the role to continue to meet the requirements after deductions.
Some definition of ‘related organisation’ would also be helpful. Whether this is meant to be a parent company / part of a group of companies, or whether a company holding shares in the sponsor is a ‘related company’ is not clear at present.
For now, the safest course of action is for applicants not to invest in any way in their sponsor or any company which could potentially be defined as ‘related’, unless they are confident the salary on their CoS will meet all requirements even with such investment deducted.
4. Other Amendments to Guidance – Sponsor Licence Fees and Administrative Costs
Further our article Skilled Worker Sponsor Licence Guidance: 2025 Updates, Parts 1-3 Sponsor Licence Guidance have also been updated to clarify that sponsor licence fees cannot be paid by sponsored workers in all routes, rather than just Skilled Worker, which had been the case since 31 December 2024.
5. Sponsor Licence Fees: Broader Restrictions Across All Routes
The Guidance makes clear in Part 1 that the Company must pay the fees:
L6.17. You are responsible for paying the sponsorship fees listed above. If you are granted a licence, we will normally revoke your licence if you recoup, or attempt to recoup, by any means, the following fees from a worker you are sponsoring:
- the Skilled Worker sponsor licence fee (including the fee for adding that route to your existing licence), and any associated administrative costs, where you recoup, or attempt to recoup, that fee or those costs on or after 31 December 2024;
- the sponsor licence fee on any other route (including the fee for adding that route to your existing licence), and any associated administrative costs, where you recoup, or attempt to recoup, that fee or those costs on or after 9 April 2025;
- the Certificate of Sponsorship fee, and any associated administrative costs, for a Skilled Worker, where that Certificate was assigned on or after 31 December 2024;
- the Certificate of Sponsorship fee, and any associated administrative costs, for a worker sponsored on any of the following routes, where that Certificate was assigned on or after 9 April 2025:
- any of the Global Business Mobility routes
- Minister of Religion
- International Sportsperson
- Scale-up
- Seasonal Worker
- the Immigration Skills Charge for a Skilled Worker or a Senior or Specialist Worker, where you are required to pay this.
6. What Counts as Administrative Costs for Sponsor Licences?
Setting out more clearly what ‘administrative costs’ include is helpful addition:
L6.18. ‘Associated administrative costs’ means any costs incurred by you to obtain, use or maintain your licence and includes, but is not limited to:
- fees for premium services or priority services for sponsor licence applications, changes of circumstances requests, or assigning, requesting or applying for a Certificate of Sponsorship;
- fees for legal advice related to applying for, using or maintaining your sponsor licence, or assigning, requesting or applying for a Certificate of Sponsorship;
- immigration advice or immigration services provided by a third party to a sponsored worker where the worker did not have a genuine choice in whether, or how, to obtain such advice or services, or where you provide such advice or services to the worker directly.
Part 3 – Compliance, has now been updated in line of course so recouping fees from workers in any route are now grounds for revocation. It is sensible that this is now aligned across sponsorship routes, and ought to protect migrant workers against unscrupulous business practices.
7. Contact Our Immigration Barristers
For expert advice and assistance in relation to Skilled Worker Sponsor Licences, and Sponsor Licences in other routes, please contact our immigration barristers in London on 0203 617 9173 or via the enquiry form below.
