A job offer can settle the salary, start date and responsibilities while leaving one expensive question unresolved: who actually pays for sponsorship?
The uncertainty can sit inside a short repayment clause. An employer agrees to fund the process, but expects the employee to repay “all immigration costs” if they leave within a particular period. Both sides sign. The arrangement appears settled.
Yet the signature does not resolve the immigration position. For Skilled Worker sponsorship, some costs must remain with the employer. Other expenses require a separate assessment of the agreement and its effect on salary.
Our view is that employers should settle these questions before making the financial commitment. A workable sponsorship budget needs to identify each cost, who bears it and what happens if the employment ends early.
Which sponsorship costs must the employer pay?
The Immigration Skills Charge is an employer obligation under the Immigration Skills Charge Regulations 2017, where applicable. Home Office guidance expressly prevents the sponsor from passing it to the worker. Exemptions determine whether the charge is payable; they do not create an alternative arrangement under which the employee pays it.
The sponsor licence fee and Certificate of Sponsorship fee also have restrictions on recovery. For Skilled Worker licences, the guidance prohibits recovery, or attempted recovery, of the licence fee and associated administrative costs from a sponsored worker on or after 31 December 2024. This includes the fee for adding the route to an existing licence.
For a Skilled Worker Certificate of Sponsorship assigned on or after 31 December 2024, the sponsor must also bear the certificate fee and associated administrative costs. The Home Office says it will normally revoke a licence where the sponsor recovers, or attempts to recover, these prohibited costs.
The dates deserve attention when reviewing an older arrangement. The licence rule concerns when recovery is attempted; the certificate rule refers to when the certificate was assigned. Different routes also have different commencement dates.
For employers, these costs belong in the recruitment budget from the outset.
A legal fee needs to be examined by purpose
A professional invoice can contain several kinds of work. Some may concern the employer’s licence or certificate. Some may concern the worker’s personal application. Treating the whole bill as one recoverable expense can obscure the distinction.
The Home Office’s definition of associated administrative costs includes legal advice about obtaining, using or maintaining a sponsor licence, and work concerning Certificates of Sponsorship. It also includes certain priority service charges.
There is a further point: the definition includes immigration advice or services provided to a sponsored worker by a third party where the worker lacked a genuine choice about whether, or how, to obtain them.
An employer should therefore look beyond whose name appears on the invoice. Who required the advice? Who selected the provider? What work was performed? What freedom did the worker actually have?
Our recommendation is to separate the work and charges clearly at the point of instruction. That gives finance, HR and the worker a shared understanding before anyone discusses reimbursement. A different invoice heading cannot resolve a problem with the substance of the charge.
What about visa application fees and the health surcharge?
The worker’s visa application fee and Immigration Health Surcharge fall into a different category from the employer’s sponsorship charges. The standard Skilled Worker application requires the applicant to meet these costs where applicable; an employer may offer to fund them as part of the employment package.
The surcharge is not payable in every case. Eligible Health and Care Worker applicants, and their qualifying dependants, are exempt.
An employer’s offer to pay personal application expenses should explain whether the payment is an unconditional benefit, a loan or support subject to a proposed repayment arrangement. Those choices need to be understood before the application is submitted.
A worker comparing two offers also needs that clarity. A contribution that must be repaid may have a different practical value from an employer-funded benefit. The distinction affects household budgeting as well as recruitment.
Any proposed recovery still needs examination under the relevant immigration and employment rules. Classifying a cost as personal does not, by itself, settle the terms on which an employer can recover it.
Repayments can change the salary assessed for the visa
The salary written in the employment contract is only the starting point.
Under paragraph SW 14.2A of Appendix Skilled Worker, specified payments to the sponsor or a related organisation, including salary deductions, loan repayments and investments, are subtracted when assessing salary. Those subtractions are averaged over the sponsorship period. The exception concerns genuinely optional additional benefits unrelated to business costs, immigration costs or investment.
The caseworker guidance confirms that payments connected with immigration costs must be considered in this assessment. An employer should therefore examine a proposed visa loan alongside the salary calculation.
Consider a hypothetical worker offered £44,000 a year over three years of sponsorship. The employer also provides a £3,000 loan for personal visa costs, repayable during that period. If those repayments fall within SW 14.2A, the annualised subtraction is £1,000. The salary to assess would be £43,000, before considering any other relevant adjustments. This illustrates the calculation, rather than a particular occupation’s required salary.
The remaining figure must be assessed against the requirements applicable to that worker and role.
Our practical conclusion is that repayment terms should be reviewed before the Certificate of Sponsorship is assigned. Payroll arrangements and immigration preparation need to use the same assumptions. Our guidance on sponsored worker salary changes addresses the wider issue of reviewing pay.
Can an employer recover costs if the worker leaves?
Employers may reasonably want to understand their exposure when funding a hire. Whether a particular repayment clause is enforceable requires separate consideration of the cost, wording and circumstances.
For deductions from wages in Great Britain, section 13 of the Employment Rights Act 1996 sets the starting framework. A deduction generally needs a statutory basis, an applicable contractual provision or the worker’s prior written agreement, subject to the legislation’s exceptions.
That is a separate question from sponsor compliance. Contractual consent does not displace the Home Office’s prohibition on recovering specified sponsorship costs. Equally, the absence of that particular prohibition does not establish that a deduction is lawful. Minimum wage rules and the circumstances of the payment may also matter.
A clause covering “all costs” needs particular care. Does it identify the expenses? Does the amount reduce over time? What happens on redundancy, dismissal or an employer’s breach? How are refunds treated?
These are questions for a properly considered agreement. Disputed employment debts or deductions may require an employment law adviser alongside immigration advice.
Retention should begin with a sustainable offer
There is also a commercial judgement beyond the legal rules.
In our view, an employer should assess the recruitment proposal on the basis that prohibited sponsorship costs remain business expenditure. If the hire only appears affordable because the worker will eventually reimburse those costs, the budget needs revisiting.
Where personal expenses are funded, clarity helps both sides. A worker should be able to understand the commitment without reconstructing it from an offer letter, a payroll instruction and several invoices.
Employers should also examine how a repayment demand might operate in practice. A substantial debt falling due on departure can affect a worker’s ability to leave an unsuitable role. The terms deserve careful thought even where recovery might be legally available.
Retention is better supported by a role the employee can realistically sustain: clear duties, workable conditions, credible progression and an honest account of the financial commitment.
What should employers review before agreeing sponsorship?
Start with an itemised cost schedule. Record the purpose of each charge, who incurs it, who pays it and whether any recovery is proposed. Separate the sponsor’s costs from the worker’s application expenses.
Then compare that schedule with the employment offer, any loan agreement and the proposed payroll treatment. Ask whether the salary assessment includes the relevant payments and whether the worker has received a clear explanation.
For an existing arrangement, establish the relevant dates and payment history before drawing conclusions. Keep the invoices, agreement and repayment records together so the position can be assessed accurately.
These are practical recommendations for making a decision that different teams can implement consistently. They sit alongside the wider Skilled Worker employer requirements and the responsibilities attached to a business sponsor licence.
The strongest sponsorship offer is one both sides can understand before they commit. It accounts for the employer’s obligations, explains any support for personal expenses and tests the effect of repayments on the visa position.
If your business is preparing a sponsored hire and needs the immigration implications of its proposed funding arrangements assessed, Request a Case Assessment.
