The immigration skills charge and the real cost of sponsorship

The immigration skills charge is the single largest recurring cost of UK sponsorship. It rose 32% in December 2025. Yet most hiring managers still model sponsorship using the visa fee alone. Therefore they underestimate a five-year hire by several thousand pounds. This guide sets out the real numbers.

What is the immigration skills charge?

The immigration skills charge is a levy that UK employers pay when they assign a certificate of sponsorship to a Skilled Worker or a Senior or Specialist Worker. The Home Office collects it upfront, in full, for the entire sponsorship period. Employers cannot recover it from the worker, directly or by deduction.

The charge applies per worker, not per licence. Consequently, sponsoring four people costs four times as much.

How much does the immigration skills charge cost in 2026?

Rates depend on sponsor size. Small or charitable sponsors pay £480 for the first 12 months, then £240 for each further six months. Medium and large sponsors pay £1,320 for the first 12 months, then £660 for each further six months. These rates took effect on 16 December 2025, according to GOV.UK sponsorship guidance.

Over a five-year certificate of sponsorship, a large sponsor therefore pays £6,600 per worker. A small sponsor pays £2,400. Over three years, the figures are £3,960 and £1,440.

Some sponsorships are exempt. For example, the charge does not apply to research and higher education occupation codes, to students switching in-country to a work route, or to dependants.

What is the sponsor licence cost before you hire anyone?

A sponsor licence costs £611 for small or charitable sponsors and £1,682 for medium and large sponsors. Since April 2024, that licence no longer expires or needs renewing. It stays valid while you keep meeting the eligibility requirements, so the sponsor licence cost is a genuine one-off. Scale-up and UK Expansion Worker licences are the exception, running four years. Each certificate of sponsorship then costs a further £525. Both figures come from the Home Office fee table in force since 8 April 2026.

The sponsor licence cost is only the entry ticket. Compliance duties follow: right-to-work checks, reporting changes within set deadlines, record-keeping, and Home Office audits. Those duties carry a staffing cost that rarely appears in a hiring model.

What is the full cost of sponsoring a worker in the UK?

A medium or large sponsor bringing one worker from overseas on a five-year visa faces roughly £15,600 in government fees. Employer-mandatory items account for £8,807 of that. The remainder can, legally, sit with the worker.

Cost item	Amount	Who may pay
Sponsor licence (large, one-off)	£1,682	Employer only
Certificate of sponsorship	£525	Employer only
Immigration skills charge (5 years)	£6,600	Employer only
Visa application, applying from overseas	£1,618	Either party
Immigration health surcharge (5 years)	£5,175	Either party
Total	£15,600

The immigration health surcharge runs at £1,035 per year for the worker and for each adult dependant. Children under 18 pay the reduced rate of £776 per year. A partner and two young children therefore add £12,935 in surcharge across five years, before their own visa fees.

Salary sits on top. Skilled Worker roles must pay at least £41,700 or the occupation going rate, whichever is higher. A lower £33,400 threshold covers new entrants and immigration salary list roles, which must still reach 70% of the going rate.

Which sponsorship costs can you legally recover?

You cannot pass on the immigration skills charge, the sponsor licence fee, or the £525 certificate of sponsorship fee. Doing so puts the licence at risk. You may agree that the worker pays the visa fee and health surcharge, although many employers absorb both to stay competitive on offers.

Clawback clauses are common. However, they must be proportionate and they cannot cover the prohibited fees.

When does an employer of record cost less than sponsorship?

An employer of record removes the sponsor licence cost, the certificate of sponsorship fee, and the immigration skills charge entirely, but only where the worker already holds the right to work. It is not a route around immigration control. Be clear on that distinction before you model it.

The comparison therefore works in three situations. First, you are hiring someone already settled in the UK and cannot justify licence setup and compliance overhead for one or two heads. Second, the role can sit anywhere, so you place it where the candidate already holds status. Third, you are testing a market before committing to an entity. Our EOR versus entity cost comparison models the first two cases.

Where a candidate genuinely needs a visa, sponsorship remains the route. The honest question is not whether an EOR is cheaper. It is whether this particular hire needs sponsorship at all. For a wider view of the trade-offs, see when an employer of record is worth it.

Build the model before you build the business case

Sponsorship rewards employers who plan. Model the full five years, include dependants, and decide early which costs you will absorb. Above all, separate the hires that need sponsorship from the hires that merely default to it.

Borders, regulation, and talent now meet on every hiring plan. Octagon Professionals provides the structure that lets organisations operate across them with clarity, compliance, and trust. We reduce concrete risks: compliance failures, misclassification penalties, and licence exposure you did not budget for. You keep full control of salary, benefits, and working arrangements. We remove the administrative burden, not your decision-making power.

Frequently asked questions

Who pays the immigration skills charge, the employer or the employee?

The employer pays it, always. Home Office rules prohibit recovering the charge from the sponsored worker, directly or through deductions. Breaching this rule can cost you your sponsor licence. The worker may, by agreement, pay their own visa fee and health surcharge instead.

Is the immigration skills charge refundable?

Yes, in several cases. You receive a refund if the visa application is refused or withdrawn, if the worker never starts the job, or if the Home Office grants less time than you requested. Partial refunds also apply when sponsored employment ends early.

How much does a sponsor licence cost for a small business?

Small and charitable sponsors pay £611, and that licence no longer expires. A business counts as small by meeting two of three tests: turnover under £15 million, balance sheet under £7.5 million, or 50 staff or fewer. Each certificate of sponsorship then adds £525.

What is the cost of sponsoring a worker in the UK for three years?

A large sponsor pays roughly £10,100 in government fees for one overseas hire on a three-year visa. That covers the licence, certificate of sponsorship, immigration skills charge, visa fee, and health surcharge. Dependants and salary costs sit on top of that figure.

Can an employer of record sponsor a UK visa for me?

Generally no. Most UK employer of record arrangements require the worker to already hold the right to work. An EOR removes payroll, contract, and compliance burden. It does not replace the sponsorship system where a visa is genuinely needed.