How Much Does a UK Employer Need to Pay a Worker on a Skilled Worker Visa?

Posted onApril 19, 2021

The Immigration rules on minimum salary thresholds for skilled worker visa applicants are already complicated and, in the view of immigration solicitors, confusing for business owners looking to recruit skilled migrant workers from the EU or non-EEA countries. The rules on pay for those employed on skilled worker visas changed on the 6 April 2021, even though the original rules were only brought into force in December 2020, just four months ago. That’s why immigration solicitors say that it pays to keep up with the Immigration rules. In this blog our business immigration lawyers look at how much a UK sponsoring employer needs to pay a worker on a skilled worker visa.

UK Immigration solicitors

For advice on hiring skilled migrant workers or help with Sponsor Licence compliance or any aspect of business immigrationlaw call the immigration law team at OTS Solicitors on 0203 959 9123 or contact us online. Appointments are available by phone or video call.

What is the pay for a worker on a skilled worker visa?

The minimum salary threshold for the skilled worker visa isn’t to be confused with the national living wage or the national minimum wage.

The minimum salary threshold is set by the Home Office, after recommendations by the Migration Advisory Committee (MAC), and only applies to those recruited from overseas on skilled worker visas.

Until the 6 April 2021, UK sponsoring employers recruiting skilled migrant workers under the skilled worker visa route usually needed to pay the workers:

An annual gross salary which amounts to or exceeds the general salary threshold of £25,600 gross per year or if the going rate for the job is higher than the general salary threshold then
One hundred percent of the ‘going rate’ for the job the skilled migrant worker has been employed to undertake. The going rate depends on the job occupation code and is set by the Home Office.

However, the confusion for many UK employers is that there are many exceptions to the above rule. It therefore pays for UK business owners to understand the minimum salary that can be paid to skilled worker visa holders, depending on the visa applicants circumstances. In addition, the salary rules changed on the 6 April 2021.

What are the new pay rules for workers on skilled worker visas?

The Home Office published a new statement of changes to the Immigration rules on the 4 March 2021.

The statement of changes introduces a minimum hourly salary for skilled worker visa holders. This means UK employers need to work out the hourly rate they pay skilled migrant workers on skilled worker visas as well as providing annual gross salary information.

The minimum hourly pay for a sponsored employee can now be no less than £10.10 an hour. This hourly rate is the case even if the gross annual salary is at or above £25,600 a year or falls within an exception, such as the worker is a new entrant or the job is on the shortage occupation list.

This means that with effect from the 6 April 2021 , most skilled worker visa applicants will need to be paid a salary that must amount to or exceed:

£25,600 gross per year and
£10.10 per hour and
The going rate for the occupation code applicable to the job the skilled worker visa applicant is being recruited for.

Why has the Home Office introduced an hourly rate for skilled worker visa applicants?

The Home Office explanatory guidance to the Immigration rule changes says that a minimum hourly rate has been introduced to avoid the situation where sponsoring employers are paying skilled migrant workers the minimum salary threshold of £25,600 per year (or the appropriate annual salary for their circumstances) but then requiring the worker to work long hours or unpaid overtime so the reality is that skilled migrant workers are working very long hours for a pay of £25,600 per year.

Can a UK employer reduce the salary of a skilled migrant workers on a skilled worker visa?

There may be circumstances where a sponsoring employer wants to reduce the salary of a skilled worker visa holder. If a sponsoring employer wants to pay a skilled migrant worker less than the salary agreed at the time the certificate of sponsorship was allocated then a fresh visa application has to be submitted, with details of the new salary.

What is the minimum salary for a new entrant on a skilled worker visa?

A ‘new entrant’ can be paid a salary which equals or exceeds :

£20,480 gross per year and
£10.10 per hour and
Seventy percent of the going rate for the job.

An applicant for a skilled worker visa is classed as a new entrant if they are under the age of twenty- six or if they meet all of the following conditions:

Their most recent visa was a student visa and their student visa expired less than two years prior to the date of their skilled worker visa application and
The student visa was for an eligible qualification, namely a UK bachelor’s degree, or a UK master’s degree, or a UK PhD or other doctoral qualification, or a Postgraduate Certificate in Education or a Professional Graduate Diploma of Education and
The skilled worker visa applicant completed (or are applying no more than three months before expected to complete) their qualifying course or they are studying for a PhD and have completed at least twelve months of study in the UK towards their PhD.

A skilled worker visa applicant can also be classed as a new entrant if:

They are in a postdoctoral position in one of a number of specified occupation codes, such as chemical scientists or biological scientists and biochemists or physical scientists, or
The job offer is in a UK regulated profession and the skilled worker visa applicant is working towards a recognised professional qualification for that profession or
The skilled worker visa applicant is working towards full registration or chartered status with the relevant professional body for the job in which they are being sponsored.

Lower salaries for shortage occupation list jobs and PhD qualifications

There are two other ways a skilled worker visa applicant can qualify for the visa even though the salary on offer is less than £25,600 per year or the relevant percentage of the going rate for the job, namely:

Job on the shortage occupation list- a skilled worker visa applicant with a job offer for a job in a shortage occupation may be paid a salary which amounts to or exceeds £20,480 gross per year and eighty percent of the going rate for the job. The key is to check the occupation code to see if the sponsoring employer is recruiting for is on the shortage occupation list.
PhD qualification- if a job applicant has a PhD qualification that is deemed relevant to the job they have applied for, then the skilled worker visa applicant will qualify for the visa if they will be paid a salary which amounts to or exceeds £23,040 gross per year and ninety percent of the going rate for the job.
PhD qualification in a STEM subject- If a skilled migrant worker has a PhD qualification in a STEM subject that is relevant to the job, then to qualify for a skilled worker visa they can be paid a salary which amounts to or exceeds £20,480 gross per year and eighty percent of the going rate for the job’s occupation code.

What amounts to salary for the minimum salary threshold?

It is important that UK employers understand what amounts to ‘salary’ for the purposes of checking whether the salary on offer for the job meets the minimum salary threshold and the eligibility criteria for a skilled worker visa.

When calculating salary for the minimum salary threshold, gross basic pay is used, rather than net pay after deduction of tax, national insurance and pension payments. However, if your industry typically pays a significant proportion of the pay in overtime, shift pay or commission or in benefits (such as free accommodation for hospitality workers or construction workers) then you may fall foul of the rules on calculating and meeting the minimum salary threshold. That is because the Immigration rules will not allow a UK employer to include shift pay, overtime or bonuses (however frequent the bonus) or allowances when calculating gross pay.

A UK sponsoring employer also can't add in the cost of recruiting a skilled migrant worker as part of their salary package so , for example, payment of the Immigration health surcharge doesn’t count towards the minimum salary threshold.

The upshot

Ensuring that your job vacancies meet the eligibility criteria for a skilled worker visa isn’t straight forward. It is best to take sponsor licence advice or to pay particular care when looking at the Immigration rules on minimum salary thresholds, occupation codes and the shortage occupation list. That’s because if the Home Office has reasonable grounds to believe a business hasn’t chosen the right occupation code or an employer says that the job is on the shortage occupation list when the Home Office doesn’t believe that the job on offer meets the criteria, the skilled worker visa applicant will have their skilled worker visa application refused. This will create delay in the recruitment process and also potentially compliance and audit issues with the Sponsor Licence.

UK Immigration solicitors

For specialist advice on hiring skilled migrant workers or help with a sponsor licence application or Sponsor Licence management and sponsor licence compliance call the immigration law team at OTS Solicitors on 0203 959 9123 or contact us online. Appointments are available by phone or video call.