How to calculate salary for a skilled worker visa

How Skilled Worker salary rules work

How salary thresholds are decided

• There is a minimum salary floor, known as the threshold
• There is also a role-specific going rate
• You must always offer the higher of the two
• Some workers qualify for discounts (for example, new entrants)

Salary components you need to check

• Minimum salary threshold
• Going rate for the occupation (SOC code)
• Any applicable discounts
• Weekly working hours

Step-by-step example - Electrical Engineer on a Graduate visa

Overview

• Role: Electrical Engineer
• SOC code: 2123
• Visa status: Graduate ('new entrant' discount applies)
• Standard working week: 37.5 hours

Step 1: Find the minimum salary threshold

To sponsor a new worker under the Skilled Worker route, the lowest gross annual salary you can offer is £41,700 (£17.13 per hour). 

You can find this in Appendix Skilled Worker, Option A (gov.uk).

Step 2: Find the going rate for the role

For an Electrical Engineer

• The annual going rate is £58,700 (£30.10 per hour)
• This is based on a 37.5-hour working week

Step 3: Apply discounts (if applicable)

If applicable, discounts can bring down the salary you must offer.

For example, the new entrant discount for someone on a Graduate visa:

• Lowers the £41,700 salary to £33,400
• Cuts the £58,700 annual going rate to £41,100

Step 4: Compare the figures

You must offer the highest of these figures.

• The lowest salary you can offer is £41,700. With a new entrant discount applied for someone on a Graduate visa, this is cut to £33,400
• The going rate is £58,700. With a new entrant discount applied for someone on a Graduate visa, this is cut to £41,100

As the sponsor must offer the highest of these figures, the salary offered must be £41,100.

If the working hours are different

Pro-rata the salary for longer hours

The going rate must be pro-rated according to the workers contractual hours. This applies to the going rate only. The threshold remains the same.

If the worker is hired to work 45 hours per week, the salary would need to be calculated:

• The annual going rate is £58,700

Calculation:

• £58,700 x (45 ÷ 37.5) =  £70,440

If the worker is on a Graduate visa, the salary would need to include the 70% discount as they are a 'new entrant':

• £70,440 x 0.7 = £49,308

Final salary you must offer

Without discounts, offer a salary of £70,440 for a 45-hour week.

If the Electrical Engineer qualifies as a new entrant, offer a salary of £49,308 for a 45-hour week. This cuts the ‘going rate’ of £70,440 by 30%.

More complex salary examples

Example 1: Existing worker using transitional arrangement rules

An Electrical Engineer may qualify for the transitional arrangement rules if they were granted permission as a Skilled Worker under the rules before 4 April 2024. They must have held continuous Skilled Worker permission since then and their current application must be before 4 April 2030.

• Role: Electrical Engineer
• SOC code: 2123
• Working week: 37.5 hours
• Transitional general salary threshold: £31,300
• Transitional going rate: £47,100

The transitional thresholds and the going rates are lower than the standard rates. You must still offer the higher figure of the two. The minimum salary for this example is £47,100. If the worker does not meet all the transitional conditions, check the salary against the standard rules instead.

The lower transitional salary rates only apply to workers who were on the Skilled Worker route before 4 April 2024 or who had a certificate of sponsorship assigned before that date. Skilled workers with certificates of sponsorship after 4 April 2024 must meet higher salary rates and may need to show a higher salary than at their first application.

Example 2: Applying a new entrant discount to part-time work

An Electrical Engineer qualifies as a new entrant and will work 30 hours a week.

• New entrant general salary threshold: £33,400
• New entrant discount of 70% to going rate: £41,100
• Pro-rated going rate: £41,100 × (30 ÷ 37.5) = £32,880

The minimum salary is £33,400 because the general threshold is higher. The general threshold is based on actual annual pay and cannot be pro-rated for part-time hours.

Restrictions on salary discounts

• Salary discounts cannot be combined. Use one eligible salary option and compare its general threshold with the corresponding percentage of the going rate. This may be relevant if the applicant qualifies as a new entrant but also has a PHD relevant to the job.
• A job on the Immigration Salary List can reduce the general salary threshold, but the full going rate may still apply. 
• New entrant status is time-limited. Combined permission as a Graduate, Skilled Worker or Tier 2 worker cannot exceed four years if the worker relies on the new entrant option
• Discounted going rates do not apply to settlement applications
• Only eligible guaranteed basic gross pay should normally be included. Do not use bonuses, overtime, shift allowances, benefits or one-off payments to reach the threshold.

Example 3: Returning from maternity leave on reduced hours

A sponsored Electrical Engineer returns from statutory maternity leave. The absence was reported correctly on the Sponsorship Management System. Reduced pay during statutory maternity leave was permitted.

The salary must be recalculated if the worker wants to return on a new working pattern. 

Upon return, the worker wants to reduce their working week from 37.5 hours to 30 hours.

• General salary threshold: £41,700. This is not pro-rated for part-time hours
• Pro-rated going rate: £58,700 × (30 ÷ 37.5) = £46,960

The minimum salary is £46,960 because it is higher than the £41,700 general threshold. The sponsor must also check that the revised salary still meets the same salary points option used for the worker's current permission.

Report the change in salary and working hours through the sponsorship management system within 10 working days. Action will be needed if the revised salary does not remain eligible under the same salary option. The worker may need to make a change in employment application before the lower salary can be paid.