Significant changes to permitted salary deductions for Skilled Workers

From 9 April 2025, the Immigration Rules will be amended to introduce a new rule relating to permitted deductions from a sponsored worker’s salary. This will apply to Certificates of Sponsorship issued after 9 April 2025. 

Under the new rule, when assessing whether a sponsored worker meets the required baseline and going rate salary requirements, any proposed deductions from a sponsored worker’s salary for business costs, immigration costs or business investment will need to be taken into account. 

The rule specifically relates to the following deductions:

1. deductions from salary; or
2. repayments of loans; or
3. investments

It does not relate to payments that have been made to provide an additional benefit offer which the applicant has a genuine choice whether to take up, for example salary sacrifice arrangements.

Sponsors are already prohibited from passing on the cost of the Immigration Skills Charge, Certificate of Sponsorship assignment cost and ancillary costs relating to the licence and/or CoS assignment process to their sponsored migrants.

Other deductions, for example to recover payments made on the sponsored worker’s behalf to cover the cost of the visa application fee or immigration health surcharge are still permitted, provided there is an agreement in place to cover the recovery of these costs, and any recovery is reasonable and compliant with employment law principles.

This new Rule now requires that these deductions will be discounted from the sponsored worker’s annual salary when assessing whether the salary requirement is met.

Sponsors must ensure that the salary is high enough to meet the required salary threshold under the Immigration Rules after all the deductions referenced above have been taken into account. 

Failure to do this would be a significant breach of sponsor duties which could lead to the suspension and revocation of the sponsor licence held by the sponsor.