It is crucial for sponsor employers to understand how Home Office calculate whether a skilled worker’s salary meets the Skilled Worker requirements, including the rules on allowances and pro-rating.
You must ensure you understand the rules on calculation of salary (including allowances, pro-rating and how Home Office assess compliance with salary requirements). Home Office monitors migrant workers’s salaries via HMRC records. Once Home Office establishes that there could be underpayment they contact sponsor employers and seek evidence but at that point they will not tell you what they had already found.
Money paid by the skilled worker to the sponsor or related organisation
When Home Office calculate whether the worker’s salary meets the applicable salary thresholds, Home Office 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
When making this calculation, Home Office will average any such deductions over the period the worker is being sponsored for, as stated on their CoS.
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.
Allowances
Subject to the transitional provision listed below, we Home Office will only take into account guaranteed basic gross pay (before income tax and including employee pension and national insurance contributions, and other guaranteed payments which are treated exactly the same as basic gross pay for tax, pension and national insurance purposes). Home Office will not take into account other allowances, pay or benefits (even if they are guaranteed), such as any of the following:
- pay which cannot be guaranteed because the nature of the job means that hours fluctuate
- additional pay such as shift allowance, or overtime or bonus pay, whether or not it is guaranteed
- employer pension and employer national insurance contributions
- any allowances, such as accommodation or cost of living allowances
- in-kind benefits, such as equity shares, health insurance, school or university fees, company cars or food
- one-off payments, such as ‘golden hellos’
- any payments relating to immigration costs, such as the application fee or Immigration Health Charge
- payments to cover business expenses, including (but not limited to) travel to and from the worker’s home country, equipment, clothing, travel or subsistence
When you enter the worker’s gross salary on their Certificate of Sponsorship (CoS), you must not include any allowances, such as those listed above, in the figure. If we find you have done so, and a transitional provision does not apply, Home Office may revoke your licence.
Transitional provision for allowances
If the worker is in the UK and is applying for permission to stay (or settlement), you may include guaranteed allowances in the salary figure entered on the worker’s CoS if all of the following conditions are met:
- the worker was previously granted permission as a Tier 2 (General) Migrant and has had continuous permission as a Skilled Worker or Tier 2 (General) Migrant ever since
- you sponsored the application which led to the worker’s last grant of permission and you are continuing to sponsor the worker; and
- the allowances are guaranteed, will be paid for the duration of the worker’s permission, and would be paid to a local settled worker in similar circumstances, such as London weighting
The other restrictions outlined in this section (including on other allowances and pro-rating) still apply. The application for permission to stay (or settlement) must be made before 1 December 2026, after which this transitional provision will end.