Salary compliance in practice is increasingly becoming a central focus for UK sponsors, shaping how organisations plan, manage, and monitor their workforce. The topic itself sits at the intersection of policy, payroll, and practical decision-making, creating a landscape where employers must balance operational needs with careful adherence to structured pay frameworks. As sponsorship continues to evolve, the way overtime is recorded, allowances are assigned, and hours are organised has become part of a much larger conversation about maintaining consistency, transparency, and integrity across the workplace. Against this backdrop, many employers are taking a closer look at their salary practices, reconsidering long-standing assumptions and refining internal processes to keep pace with modern compliance expectations.
Latest Rules for Skilled Worker Salary Thresholds
To comply with salary obligations, sponsors must base pay on either the general minimum threshold or the occupation-specific going rate, whichever is higher. According to updated guidance on the GOV.UK “Sponsor a Skilled Worker” page, these changes came into force for Certificates of Sponsorship (CoS) assigned on or after 22 July 2025.
Here are some of the key threshold changes:
- The general minimum salary threshold has increased from £38,700 to £41,700 for most Skilled Worker visa applications.
- For those with a relevant PhD, the threshold rises from £34,830 to £37,500.
- For “new entrants” (for example, recent graduates) or roles listed on the Immigration Salary List, the threshold goes from £30,960 to £33,400.
- There is a transitional salary level for workers who held a Skilled Worker visa before 4 April 2024: this is now £31,300 instead of the previous £29,000.
- The hourly rate implied by the new general threshold is approximately £17.13 per hour, based on a 37.5-hour working week.
All of these changes were announced in the Statement of Changes to the Immigration Rules (HC 997) and are reflected in the Sponsor Guidance.
What Counts Towards Salary for Compliance Purposes?
One of the most nuanced areas in salary compliance is understanding what pay elements count toward your obligations as a sponsor. Not everything an employer pays an employee is counted in the same way when assessing skilled worker salary compliance.
Base Salary
This is the fixed, regular pay the worker receives. It is the core component that must meet either the general threshold or the SOC going rate.
Overtime and Additional Hours
Where workers do overtime (or additional hours beyond their basic contract), those earnings can typically count toward the salary threshold — if they are guaranteed and regular. For example, if an employee has a contractual overtime arrangement (say, “overtime paid at a premium rate every month”), sponsors can include the expected overtime pay in calculations, provided it is regular and guaranteed.
However, if overtime is purely ad hoc or variable without a formal arrangement, it’s riskier to rely on it. Immigration compliance assessors may not accept speculative or non-guaranteed overtime as reliable for meeting salary thresholds.
Allowances
Allowances are more complex. Some are permissible for the purpose of meeting salary requirements; others are not. According to the updated Immigration Rules, permitted allowances may include things like:
- London weighting
- Shift or unsocial hours allowance
- Responsibility allowance (if regularly paid and documented)
But not all allowances are acceptable. For example, non-guaranteed bonuses, one-off payments, or cost-of-living payments not signalled in the Certificate of Sponsorship (CoS) can be problematic. Sponsors should carefully document and justify such payments in the CoS so that immigration compliance checks support them.
Mid-Year Pay Changes
What happens if you increase an employee’s pay mid-year? This is especially critical where the increase pushes someone above a relevant threshold.
- If the pay rise is permanent and documented in the contract or a formal written policy, you can apply the new salary when assigning a fresh CoS (e.g., when renewing sponsorship or changing the role).
- If it’s a temporary bonus (for example, an annual performance bonus), you must check whether immigration rules will consider it part of the salary for threshold compliance. Often, one-off or discretionary bonuses are not counted.
- If the pay change is planned but not guaranteed, it is riskier to base a CoS assignment on that change unless you can formally commit to it in a contract or writing.
Pro-Ration, Compliance Traps, and Best Practices for Sponsors
Ensuring skilled worker salary compliance is not simply about paying the headline rate; it’s about demonstrating that the pay structure, role hours, and allowances are properly documented, contractual, and consistent with the CoS and immigration requirements. Here are the key best practices:
- Align Contracts and CoS
Always make sure the employment contract aligns with what is declared on the Certificate of Sponsorship. Any allowance, overtime guarantee, or salary structure must be clearly reflected in both places. - Document Everything
Keep detailed records of how often allowances and overtime are paid, whether they are guaranteed, and whether they apply regularly. This will be invaluable in compliance checks. - Use Pro-Rated Calculations Carefully
For part-time roles, calculate thresholds precisely. Do not assume that monthly pay automatically meets full-time thresholds without checking. - Plan for Mid-Year Salary Changes
If pay rises or alterations are planned, build these into your workforce planning and CoS assignment process, ensuring that the contract change is formal and documented ahead of time. - Avoid Relying on Discretionary Bonuses
Discretionary or one-off payments that are not guaranteed are risky to use for salary threshold compliance. Only use them if there is a contractual or predictable basis. - Review Regularly
Given that salary thresholds and going rates are periodically updated, sponsors should review their pay structures annually to confirm ongoing compliance. - Seek Legal or Immigration Advice Where Unclear
For roles with complex pay structures or where allowances are significant, consult immigration experts or legal advisers. Non-compliance can lead to serious consequences for the sponsor licence.
Common Pitfalls and Risk Areas
Despite best efforts, sponsors often trip up in certain areas. Here are common pitfalls to watch out for:
- Undocumented or Variable Overtime: Assuming that “typical” overtime will continue without evidence. Without guaranteed overtime, relying on it is risky.
- Non-Allowable Allowances: Counting non-guaranteed allowances (like discretionary bonuses or cost-of-living payments) that do not meet Home Office guidelines.
- Incorrect Pro-Ration: Miscalculating the pro-rated threshold for part-time workers or misunderstanding the weekly contracted hours.
- Mid-Year Changes Without Documentation: Failing to update CoS or contracts properly when a salary rise is scheduled.
- Failure to Track Compliance: Not reviewing pay structures after major regulatory changes (such as the July 2025 rules), which can leave you non-compliant unexpectedly.
Strategic Advice for Employers and HR Teams
- Audit Your Pay Structures Post-July 2025
With new thresholds now in force, run an audit of all sponsored roles. Confirm that current salaries, allowances, and contracts still meet the new compliance requirements. - Update Templates
Adjust employment contracts, CoS assignment forms, and internal salary-planning spreadsheets to reflect the new minimums and going rate structure. - Train HR and Payroll Teams
Ensure HR staff and payroll administrators understand how to pro-rate salaries, document allowances, and handle overtime in a way that supports skilled worker salary compliance. - Forecast Future Increases
If you plan to increase pay mid-year for certain roles, build those into your immigration compliance assessments when assigning CoS. - Keep Clear Records for Sponsor Audits
Maintain detailed logs of all pay components, how they contribute to thresholds, and any policy justifications. When the Home Office audits you, you’ll need to prove compliance.
Conclusion!
For sponsors navigating the evolving Skilled Worker visa landscape, keeping on top of skilled worker salary compliance is not optional—it’s fundamental. With the July 2025 salary changes now firmly in place, employers must carefully design pay structures that meet the updated thresholds, correctly include or exclude allowances and overtime, and handle part-time roles with clean pro-rated calculations.
By aligning contracts with CoS documentation, accurately tracking pay components, and staying up to date with the Home Office’s guidelines, sponsors protect both their legal status and their workforce. The best strategy is a proactive one: audit your pay policies now, train your teams, and make sure that every role you sponsor meets not just the literal rule, but the spirit of compliance too.
For more detailed guidance, expert support, and updates on sponsor licence best practices, keep following SponsorLicenceHub — your essential resource for staying compliant in a changing immigration world.
