What is the Minimum Salary for the Scale-up Visa?

Posted onSeptember 7, 2022

Hiring international talent can be a complicated business for UK employers because of the range of available business visa and work visa options and the detailed eligibility criteria for each type of UK visa. In this article, our immigration solicitors look at the minimum salary threshold for the new scale-up visa and see how it compares to alternate work visas, such as the skilled worker visa.

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For advice on applying for work visas or hiring staff from overseas call the expert London immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.

The scale-up visa

If you are a skilled overseas worker or a fast-growing UK business, the scale-up visa may be of interest to you. Since August 2022 the scale-up visa has been open to applications from skilled overseas workers but to secure the new scale-up visa a worker initially needs a sponsoring employer with a Home Office sponsor licence.

A UK company can only get a sponsor licence to sponsor scale-up visa applicants if they qualify as a scale-up business. Sponsorship Licence lawyers say the Home Office defines a ‘scale-up business’ as one where a company has had annualised turnover or staff growth of at least 20 per cent for the 3 years before their scale-up sponsor licence application. In addition, to qualify as a scale-up, the business must have had at least 10 employees at the start of the 3 years before their scale-up sponsor licence application.

If you are not sure if your business meets the scale-up criteria, or you need help with your sponsor licence application or management, call the Sponsorship Licence lawyers on 0203 959 9123.

The scale-up visa minimum salary threshold

The minimum salary threshold for the new scale-up visa is set at £33,000 gross per year or £10.58 gross per hour. That is a considerably higher salary than the minimum salary threshold for the skilled worker visa. The skilled worker visa salary threshold is set at £25,600 or the going rate for the job, whichever is the higher. However, the minimum salary threshold for the skilled worker visa can be reduced below £25,600 if, for example, the job applicant qualifies as a new entrant or the job is on the shortage occupation list.

The definition of salary for the scale-up visa

It is important to understand the detailed definition of ‘salary’ for scale-up visa purposes so you know whether, as a UK scale-up company, your job or jobs qualify for the scale-up visa. That way you can assess whether the cost of applying for a sponsor licence to sponsor scale-up visa applicants is justified.

The scale-up visa salary of £33,000 per year is the gross annual basic pay for an employee working up to 48 hours a week. It includes:

Income tax
Employee pension contributions
National insurance contributions

Any time worked by the scale-up visa holder beyond 48 hours per week does not count when assessing whether a salary meets the scale-up visa minimum salary threshold. If you are planning to recruit a worker from overseas on the scale-up visa and employ them to work more than 48 hours per week you will need to pro-rata down the salary to work out if a 48-hour week equates to a salary of £33,000 or more per year.

The £33,000 minimum salary threshold also does not take into account:

Non-guaranteed overtime
Shift allowances
Bonuses
Accommodation that comes with the worker’s employment, such as a free serviced apartment or hotel
Living allowances
Benefits such as private health insurance or free flights to the UK or back home for holidays
Company car
Subsidised rail card
Company shares scheme allocations
Employer pension contributions
Employer national insurance contributions

Whilst your company may want to offer international talent a great package of incentives to help you attract highly skilled workers to move to your UK-based business, it is unlikely that the remuneration package will count towards the minimum salary threshold of £33,000 given the detailed immigration rules on the meaning of ‘salary’.

The advantages of the scale-up visa

If the minimum salary threshold for the scale-up visa is more than the skilled worker visa, and there are so many rules about how the scale-up visa salary of £33,000 can be made up, what are the advantages of the scale-up visa over other types of work visa, such as the skilled worker visa?

Sponsorship Licence lawyers say the advantages of the scale-up visa are:

The Home Office provides a fast-tracking application service for the scale-up visa
An employer does not have to pay the immigration skills charge when they recruit a worker on the scale-up visa. Assuming your company employs a scale-up visa holder or skilled worker visa holder over a 5-year period that equates to a saving of £5,000 (based on the current immigration skills charge fees) if the worker meets the eligibility criteria for the scale-up visa rather than the skilled worker visa. That can amount to considerable savings if you need to recruit several skilled overseas workers
A scale-up visa holder only needs to be employed as a sponsored worker for the first 6 months of their visa. After that period the worker can do any job for their employer, whatever the skill level. A skilled worker visa holder or senior or specialist worker visa holder has to continue in skilled sponsored employment for the duration of their work visa

The idea behind the scale-up visa is that a UK scale-up company offers an overseas work visa applicant a genuine graduate-level skilled job for at least 6 months. However, the visa route provides greater flexibility for the employer and employee. With the senior or specialist worker visa or the skilled worker visa, the sponsored employee has to continue to hold a sponsored job with a standard occupational code for the duration of their visa. That can create issues if you want to promote the sponsored employee but the promotion takes the employee out of their job standard occupation code and the promoted job does not fall within any of the standard job codes.

The drawback of the scale-up visa, from the perspective of the sponsor licence holder, is that after 6 months on the scale-up visa, the visa holder is free to find another job without being restricted to a job with another sponsoring employer or to a skilled job. That means it is easier for a scale-up visa holder to find new employment. In an era of widespread UK skills shortages, employee retention is important and particularly where recruitment costs include the costs of applying for and managing a sponsor licence and where those costs are not capable of being reimbursed by the sponsoring employee.

One reason why a scale-up visa holder may be more willing to remain with their sponsoring employer for the duration of their visa is that the scale-up visa length is only 2 years duration. Prior to visa expiry, the scale-up visa holder either needs to apply to switch visas (for example, to a skilled worker visa) or to extend their current scale-up visa.

To qualify for a scale-up visa extension the applicant has to have been paid at least £33,000 for half their time in the UK on the scale-up visa. The salary must have been paid under the PAYE scheme to qualify so scale-up visa holders paid as freelance or consultant staff (after the initial 6-month visa period) would not qualify for a visa extension. That could be bad news for both the employee and your business if you have invested time and money in the employee’s training and you ideally want to continue to employ the worker as you hope that they will show loyalty to their employer whilst journeying to indefinite leave to remain and then British citizenship.

How can the Sponsorship Licence lawyers at OTS Solicitors help your company?

Our Sponsorship Licence lawyers can help your business with:

Advice on whether your company meets the definition of a scale-up business
Applying for your first sponsor licence so you can sponsor overseas workers
Work visa options, such as the skilled worker visa or graduate visa or frontier work permit, and if your business has a base overseas and you want to transfer employees to the UK, the senior or specialist worker visa
Allocation of certificates of sponsorship
Employment law and immigration law-related matters, such as right-to-work checks or sponsor licence reporting and recording duties for sponsored employees or allegations of immigration-related discrimination
Sponsor licence renewal applications
Sponsor licence problems, including sponsor licence management, audits, suspensions and revocation

UK Online and London Based Immigration Solicitors and Sponsorship Licence Lawyers

For advice on work visas and hiring overseas workers on sponsor licences call the Sponsorship Licence lawyers at OTS Solicitors on 0203 959 9123 or contact us online.