skilled worker visa:
Calculation of salary
7 January 2021
When hiring a migrant under the Skilled Worker visa route, employers are required to include certain information about the migrant’s salary on the Certificate of Sponsorship (CoS). This is to prove that the migrant worker is being paid a salary in line with the requirements for the route.
Under the Skilled Worker route, applicants must be paid at least the minimum salary of £20,480, or the ‘going rate’ (or, in some cases, a proportion of the going rate) for the occupation, whichever is higher.
However, it is important to understand the rules surrounding the calculation of salary for skilled workers, to ensure the information you provide to the Home Office is accurate and is a true reflection of what you will be paying your sponsored workers.
What skilled worker salary information is required?
When assigning a CoS under the Skilled Worker route, the following information about the worker’s salary package must be specified:
- The gross salary figure representing the total amount paid to the worker before tax
- A separate figure for any allowances and guaranteed bonuses, where these are permitted
- A detailed breakdown of each allowance and each guaranteed bonus
- The PAYE scheme reference number through which the worker will be paid
Can allowances be included in the salary?
Under the Skilled Worker visa route, the salary stated on the CoS should include only guaranteed basic gross pay, before income tax and including employee pension and national insurance contributions. You should not include any other allowances, pay or benefits in this figure, even if they are guaranteed.
When calculating a sponsored worker’s salary, the figure should not include any of the following allowances:
- Pay which cannot be guaranteed due to fluctuating hours
- Additional pay from overtime, shift allowance or bonuses, whether guaranteed or not
- Employer pension and employer national insurance contributions
- Cost of living or accommodation allowances
- Any payments relating to immigration costs, such as visa application fees or the Immigration Health Surcharge
- One-off payments
- Payments to cover business expenses
- Other benefits such as company cars, health insurance, equity shares, education fees or food
As a transitional arrangement, applicants in the UK applying for permission to stay or settlement, may have guaranteed allowances included in their salary figure stated on the CoS, as long as:
- The applicant was last granted permission as a Tier 2 (General) migrant
- You sponsored the application which led to that grant of permission, and you are continuing to sponsor the applicant
- The guaranteed allowances will be paid for the duration of the applicant’s permission and would also be paid to a local settled worker in similar circumstances (e.g. – London weighting).
In these circumstances, the application for permission to stay or settlement must be made before 1 December 2026.
Calculating skilled worker pro-rated salaries
The salary rates set out by the Home Office under the Skilled Worker visa route refer to annual salaries. If you are sponsoring a skilled worker for less than 12 months, the Home Office will prorate the gross actual earnings as recorded on the CoS, to the equivalent annual figure to determine if this meets the salary thresholds for the route.
It is important to note that the Home Office will only take into account salary for up to a maximum of 48 hours per week, even if the applicant works more hours than this. For example, an applicant working 60 hours per week at a rate of £8 per hour will be considered to have a salary of £19,968 (8 x 48 x 52) and not £24,960 (8 x 60 x 52). In this instance, the applicant would be ineligible for a Skilled Worker visa as they would not meet the minimum salary threshold.
For applicants working part-time, only the gross amount they earn will be taken into account, and not the equivalent full-time earnings. This means that the applicant must be paid at least the minimum salary or the ‘going rate’ within their part-time hours in order to meet the salary requirements of the Skilled Worker route. For example, an applicant working 30 hours per week at £15 per hour would have a pro-rata salary of £23,400 per annum (15 x 30 x 52), and this is the salary that should be stated on the CoS.
Notifying the Home Office of salary changes
Sponsors have a duty to report any significant changes to their sponsored workers’ circumstances to the Home Office. Any decrease to a sponsored worker’s salary should be reported via your Sponsorship Management System (SMS) within ten working days of the change taking place.
In addition to compliance visits, the Home Office will undertake regular checks with HMRC to ensure sponsors are paying at least the salary stated on the CoS, or in any other notification of a change of salary.
Understanding the UK’s new immigration rules
If you have questions regarding the calculation of salary for skilled workers, or need some assistance with any other area of UK immigration, Smith Stone Walters can help.
Our expert immigration advisors are here to support employers through the upcoming changes to immigration law, to ensure you can continue hiring the talent your business needs from anywhere in the world.
To speak to an advisor, please contact us today.
For more information on the UK’s new Points-Based Immigration System, you can download our free guide.
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