Skilled Worker Salary Planning: Stress-testing salary, hours before assigning a CoS

Assigning a Certificate of Sponsorship (CoS) to a Skilled Worker is one of the most important compliance decisions a UK sponsor can make.

While many employers focus on whether a candidate appears to meet the minimum salary threshold, the Home Office applies detailed rules on salary calculations, working hours, allowances, deductions and going rates.

A salary package that looks compliant at first glance can fail Home Office scrutiny if it has not been properly tested against the Skilled Worker salary rules.

Before assigning a CoS, sponsors should therefore carry out a thorough salary stress test to ensure the proposed role satisfies all Home Office requirements.

Start with the two-core salary test

Under the Skilled Worker route, the Home Office generally requires sponsored workers to be paid at least:

• The general salary threshold and
• The applicable going rate for the occupation code.

The worker must normally meet whichever figure is higher.

If the proposed salary falls below the required general salary threshold or applicable going rate, the visa application may be refused. The Home Office also states that action may be taken against a sponsor if workers are not paid in accordance with the salary stated on the CoS.

For this reason, salary planning should always begin with confirming the correct occupation code and identifying the relevant salary option under the Skilled Worker rules.

Check salary against actual working hours

One of the most common compliance mistakes is assuming that salary can be assessed without considering working hours.

The Home Office calculates going rates on a pro-rated basis according to the number of hours the worker will actually work. This means that a salary that satisfies the requirement for a 37.5-hour role may not necessarily satisfy the requirement for a 40-hour role, and vice versa.

Sponsors should therefore verify:

• Contracted weekly hours
• Whether the role involves regular shift patterns
• Whether hours fluctuate
• Whether any part-time arrangements apply

The hours entered on the CoS should accurately reflect the worker's contractual position.

Do not set excessive working hours

Another important stress test concerns employees who work long hours.

For general salary threshold calculations, the Home Office only counts salary based on a maximum of 48 hours per week, even if the employee regularly works more than that. A worker cannot simply exceed the salary threshold by working excessive hours.

Sponsors should therefore avoid assuming that overtime or extended working patterns will solve a salary shortfall.

If the role only meets the salary requirement because the employee works significantly more than 48 hours each week, the arrangement will not satisfy Home Office rules.

Remove non-permitted allowances from calculations

Many salary compliance issues arise because employers include payments that the Home Office does not regard as salary.

For most Skilled Worker applications, only guaranteed basic gross pay is counted towards the salary requirement.

The Home Office specifically excludes numerous types of payments, including:

• Overtime payments
• Bonus payments
• Shift allowances
• Accommodation allowances
• Cost-of-living allowances
• Employer pension contributions
• Company benefits
• Health insurance
• One-off recruitment incentives
• Reimbursement of business expenses

These amounts must generally not be included when calculating the salary entered on the CoS.

Assess irregular working patterns

Some sectors rely on seasonal, rotational or uneven working patterns.

The Home Office contains specific rules for workers whose hours vary across a regular cycle. In these circumstances, salary compliance is assessed using averaging provisions and sponsors may need to explain the working pattern when assigning the CoS.

Before sponsorship, employers should examine:

• Whether weekly hours vary significantly
• Whether unpaid rest periods exist
• Whether salary payments fluctuate during the year
• Whether the proposed pattern can be clearly evidenced

Failure to document irregular arrangements properly can create compliance risks during a Home Office audit.

Ensure national minimum wage requirements are met

Meeting Skilled Worker salary thresholds alone is not sufficient.

Sponsors must also ensure that workers are paid in accordance with National Minimum Wage legislation. A role that satisfies immigration salary thresholds but breaches wider employment law obligations can still create compliance concerns.

Ensure the CoS reflects reality

The Home Office regularly conducts compliance checks and compares salary information against HMRC records.

Sponsors are expected to pay at least the salary stated on the CoS and to maintain accurate payroll records. The Home Office guidance makes clear that discrepancies between declared and actual pay can result in enforcement action, including sponsor licence revocation.

Before assigning a CoS, employers should therefore confirm that:

• The salary has been fully budgeted
• Payroll systems are ready to support the stated amount
• Working hours are accurately recorded
• The correct PAYE arrangements are in place
• The salary can be maintained throughout the sponsorship period

Conclusion

A successful Skilled Worker application starts long before the CoS is assigned. Sponsors who carefully stress-test salary, working hours, allowances and deductions against Home Office guidance are far less likely to encounter visa refusals or sponsor compliance issues later.

By checking the headline salary figure along with the underlying structure of the remuneration package, employers can significantly reduce risk and ensure that their sponsorship arrangements remain compliant throughout the worker's employment.

If you are an employer struggling to navigate the process of procuring a Sponsor License and assigning a CoS, feel free to reach out to us at A2Z Immigration for a free consultation.