A number of changes to the Immigration Rules came into force on 09 April 2025. These were originally presented to Parliament in a Statement of Changes on 12 March 2025. See our article summarising the Statement of Changes here.

One of the primary changes relates to the Skilled Worker immigration route, in particular, how salaries are calculated; certain salary deductions can no longer be included in the salary calculation when determining if the minimum salary criteria are met. In this post, we explore the new Immigration Rules and how they can impact those sponsoring Skilled Workers going forward. 

What is the minimum salary criteria?

In order to be eligible for a Skilled Worker visa, the salary a sponsor pays to the worker must meet or exceed both of the following:

• the general salary threshold; and
• the going rate for the occupation

The applicable salary threshold and going rate payable will depend on the worker’s attributes, with some workers qualifying for reduced rates.

Generally, only guaranteed basic gross pay can be included in salary calculations, although transitional provisions exist for those who were granted permission as a Tier 2 (General) migrant and have held continuous permission as a Tier 2 migrant or Skilled Worker ever since.

If a sponsored worker’s salary does not comply with the general salary threshold and going rate, they will not be eligible for Skilled Worker permission.

Salary deductions

When calculating a Skilled Worker’s salary, sponsors weren’t previously able to include allowances for immigration costs, such as an application fee or Immigration Health Charge. However, the Rules now go one step further, and prevent a sponsor from including money that is to be repaid to them by the worker. In this regard, the 09 April 2025 changes saw the introduction of a new paragraph SW 14.2A into Appendix FM of the Immigration Rules:

“SW 14.2A. Any money paid by the applicant to the sponsor (or a related organisation) will be considered as follows:

(a) The following payments will be subtracted from salary, unless (c) applies:

(i) deductions from salary; or

(ii) repayments of loans; or

(iii) investments.

(b) Any such subtractions will be averaged over the length of time the applicant is being sponsored for, for the purpose of salary considerations.

(c) Money will not be deducted where the payment is not related to business costs, immigration costs or investment, but rather an additional benefit offer which the applicant has a genuine choice whether to take up, for example salary sacrifice arrangements.”

If a sponsored worker is required to repay their Skilled Worker application fee and/or Immigration Health Charge by way of loan repayments to their sponsor, the fees being repaid must be deducted from the salary referenced on the worker’s Certificate of Sponsorship. The same will apply to any investments made by the worker; in such circumstances, the worker’s salary after deducting their investment must comply with the general salary threshold and going rate.

Immigration Rules and guidance are not clear on whether clawback provisions, requiring a sponsored worker to repay an application fee and/or Immigration Health Charge, will also need to be taken into account. At this stage, our advice is that a sponsored worker’s salary should always comply with the information on their Certificate of Sponsorship, and any salary deductions must not mean a sponsored worker is unable to comply with minimum salary requirements contained in Immigration Rules. Sponsors should, therefore, seek advice from a specialist immigration solicitor before deducting any pay from a sponsored worker’s salary at the end of their employment.

Example

• An organisation wishes to sponsor a Skilled Worker for 5 years
• The sponsor pays the in-country application fee (£1,751) and Immigration Health Charge (£5,175), amounting to £6,926
• The sponsor asks the worker to sign a loan agreement for the worker to repay both the Skilled Worker application fee and Immigration Health Charge (£6,926) via monthly salary deductions over a period of 12 months
• The Skilled Worker will be working as a Software Developer for 37.5 hours per week
• The Software Developer going rate is £49,400 per annum / £25.33 per hour for new sponsorships (with no deductions)
• The going rate exceeds the general salary threshold of £38,700, so we know the sponsorship will comply with the general salary threshold
• Under current Immigration Rules, loan repayments for immigration costs will be subtracted from salary; subtractions will be averaged over the length of sponsorship
• The annual average in this scenario is £1385.20 (£6926 ÷ 5)
• The Skilled Worker will need to be paid at least £50,785.20 per annum (£49,400 + £1,385.20)

Remember that any payments related to the Certificate of Sponsorship and Immigration Skills Charge, including legal fees associated with such sponsorship work, can never be recouped from a sponsored worker.

What does this mean for sponsors?

The changes in relation to salary deductions will only apply to Certificates of Sponsorships assigned from 09 April 2025.

Of course, the changes in relation to salary deductions won’t cause any problems to sponsorships where the workers are paid well in excess of the general salary threshold and going rate. However, those who are paid the general salary threshold / going rate, or just above the minimum rates, will need to bear the changes in mind when preparing their next applications. If the worker’s salary - after the deductions summarised above - is lower than the general salary threshold or the going rate for the role, they won’t qualify for sponsorship and their application will likely be refused. Sponsors could also be subject to compliance action if they are not paying sponsored workers correctly.

Sponsor licence holders should carefully review their internal policies to ensure they comply with the Skilled Worker immigration route. If sponsors recoup any immigration costs from workers or if a sponsored worker is investing in the company and the Certificate of Sponsorship was assigned from 09 April 2025, sponsors will need to ensure that the salary complies with minimum salary requirements after the payments summarised above are deducted.