Skilled worker visa costs: what businesses need to budget for

Note: This article has been updated to reflect the latest Home Office changes introduced in October 2025. For a full overview of the immigration reforms, see our article on the key updates from HC 1333.

Introduction

The skilled worker visa is the main route for UK employers to bring in overseas talent — but the costs go well beyond simply paying for someone’s visa. The October 2025 reforms increased salary thresholds again, revised the Immigration Salary List, and tightened sponsorship compliance, adding to the overall cost for employers.

Whether you’re a tech company competing for global talent or a business simply trying to fill hard-to-recruit roles, the process can be challenging. Every case is different, and the best way to understand the true costs is to get tailored advice.

This article breaks down every cost you need to factor in, highlights often-overlooked charges, and shows how our solicitors can help you plan, avoid mistakes, and stay compliant. 

Our immigration solicitors act for employers nationwide and are always happy to provide clear, practical guidance on your situation.

What is the skilled worker visa?

The skilled worker visa (which replaced Tier 2) allows UK businesses with a valid sponsorship licence to hire overseas employees for skilled roles. To qualify, the role must meet a required skill level, pass salary thresholds, and satisfy the immigration rules. Employers must maintain compliance throughout the visa period. The Immigration Salary List (ISL) replaced the Shortage Occupation List and now determines which roles can qualify at reduced salary rates.

These are the main costs employers need to budget for:

Sponsorship licence (application or renewal)

• Current Home Office fee: £574 for small or charitable sponsors; £1,579 for medium or large sponsors.
• Sponsor Licence holders are no longer required to apply for renewal every four years or pay a renewal fee. Instead, all existing sponsor licences that were due to expire on or after 6 April 2024 have been automatically extended by 10 years. This change applies to both new and existing licences, and the extension is automatic, meaning no action is needed from employers.
• You’ll also need to factor in internal HR time, legal assistance, and compliance system costs.

Certificate of sponsorship (CoS)

• Issuing a CoS costs £525 per certificate under the current fee structure.
• Every worker you bring in or extend requires a new CoS.
• Accuracy is crucial — errors in job details, SOC code, or salary can lead to refusal or delay.

Immigration skills charge (ISC)

• Employers must pay the ISC, which is one of the most significant costs.
• For large sponsors: £1,000 per year per employee.
• For small or charitable sponsors: £364 per year per employee.
• The ISC is paid for the entire length of the visa at once.
• The Home Office has confirmed further increases from 16 December 2025 — to £1,320 for large sponsors and £480 for small or charitable sponsors.
• Some roles have exemptions, for example, PhD-level roles or those on the immigration salary list.

Visa application fees

• The visa fee depends on duration (less than or more than three years) and whether the role is on the ISL.
• Current fees range from £769 to £1,751 depending on application length and location (inside or outside the UK).
• Many employers absorb this cost as part of their recruitment strategy, although it may legally be the employee’s responsibility unless agreed otherwise.

Immigration health surcharge (IHS)

• £1,035 per year per employee (as of October 2025).
• Typically, the employee pays the IHS, but employers often subsidise or cover it entirely in competitive hiring markets.

Hidden or overlooked costs and risks

These costs can catch you off guard if not planned for.

• Expert legal assistance for licence applications, renewals, or refusal support.
• HR time for Sponsor Management System (SMS) administration.
• Training staff to use SMS Level 1 correctly.
• Civil penalties if sponsor obligations are breached.
• Costs arising from revocation or suspension.
• Potential need for judicial review work if a refusal or revocation is contested.

Who should pay for which cost?

Some costs must be borne by the employer, such as the licence fee and the Immigration Skills Charge. Passing these costs to employees can breach the immigration rules if handled incorrectly. Visa application fees and the IHS are often set out in employment contracts, but many employers cover them to remain competitive.

Legal framework and employer obligations

The route is governed by the immigration rules, particularly the Skilled Worker Appendix and HC 1333 (October 2025). Key changes include new salary floors, a revised ISL, and expanded sponsorship duties for employers. Employers must carefully maintain records, report changes via the SMS, and manage licences properly. Non-compliance can lead to licence revocation, civil penalties, and reputational harm.

How our business immigration solicitors can help

We support employers through every financial and procedural challenge.

• Budgeting advice to forecast total costs.
• Sponsorship licence applications, renewals, and appeals.
• Reviewing job description to align with  the eligible SoC 2020 codes, drafting and issuing valid certificates of sponsorship.
• Structuring offers to meet the new thresholds.
• Compliance audits, training, and risk management.
• Defending against revocation, suspension, or penalties.
• Tribunal and judicial review representation where required.

While every case is different, many employers want clarity on both legal fees and Home Office costs. Because no two sponsorship situations are the same, the most effective way to understand likely fees is to get in touch with our friendly team for a clear, no-obligation discussion.

FAQs for employers

Before you begin budgeting, here are some of the most frequently asked questions to our solicitors.

1. How much does it cost a UK company to sponsor a skilled worker?

   It depends, but you must budget for the licence, CoS, ISC, visa fees, IHS, and any legal or HR costs.

2. What is the immigration skills charge, and who pays it? 

   Employers pay it. It’s charged per year per sponsored employee and paid upfront for the visa’s duration.

3. Can I pass visa or application costs to the employee?

   You can, contractually, but risks exist under immigration rules and employment law — it must be handled carefully.

4. How much does a certificate of sponsorship cost?

   £525 per certificate from the Home Office (as of October 2025).

5. What happens if we don’t maintain compliance?

   Licence suspension or revocation, heavy fines, and possible inability to sponsor future staff. Licences no longer require renewal, so continuous compliance is essential.

Expert advice on skilled worker visas

Sponsoring overseas talent under the skilled worker route can open up the talent pool your business needs — but the cost landscape has become more demanding. Employers must budget carefully and stay compliant to avoid exposure. 

Sanae Sahebjalal, specialist business immigration solicitor, says:

“The biggest surprise for many employers is how quickly the costs of sponsoring a skilled worker can mount up. It’s not just the visa itself — the licence, immigration skills charge, and compliance obligations all play a part. Getting legal advice at the outset helps employers understand their true exposure, structure offers correctly, and avoid costly mistakes that can put their sponsorship licence at risk.”

Get in touch to speak with our immigration solicitors for up-to-date advice under the October 2025 rules.