UK Skilled Worker Visa: Cost & Sponsor Licence for SMEs

Summary:

• To hire most non-UK/Irish workers you must hold a sponsor licence first — a Worker licence costs £611 for small/charity sponsors and £1,682 for medium/large ones, and now lasts 10 years (renewals were abolished in April 2024).
• The employer-only costs that cannot be passed to the worker are the £525 Certificate of Sponsorship and the Immigration Skills Charge — £480/year (small) or £1,320/year (large) after the +32% rise on 16 December 2025.
• Since 22 July 2025 the general salary threshold is £41,700 (or the going rate, whichever is higher) and the skill level rose to RQF 6 (degree level); a new-entrant route allows £33,400.
• All in, sponsoring one worker from overseas for 3 years runs about £6,500 (≈£2,000 of it mandatory employer cost), of which the visa fee and the £1,035/year IHS are legally the applicant’s.

Quick answer: A UK SME must hold a sponsor licence (£611 small / £1,682 large, valid 10 years) before it can sponsor a Skilled Worker. Per hire it then pays a £525 Certificate of Sponsorship and the Immigration Skills Charge (£480/year small, £1,320/year large) — neither of which can be recovered from the worker — while the applicant pays the visa fee (£819–£1,618 from overseas) and the £1,035/year Immigration Health Surcharge. Since 22 July 2025 the worker must earn at least £41,700 (or the going rate) and the role must be RQF 6 (degree-level). Sponsoring one worker for three years costs roughly £6,500 in total.

Yes. To employ almost anyone who is not a British or Irish citizen and does not already have a UK work right, an employer must hold a valid sponsor licence in the “Worker” category before it can assign a Certificate of Sponsorship and the worker can apply for a Skilled Worker visa. There is no way around the licence for direct employment — the only alternative is to use an Employer of Record in the UK that is already the legal employer (more on that below).

The application is online and, per GOV.UK, most decisions take under 8 weeks (a priority service gives a decision in 10 working days for £750). The main steps:

1. Confirm the organisation is eligible and the role meets the skill (RQF 6) and salary rules.
2. Choose the licence type (“Worker” for Skilled Worker).
3. Appoint key personnel: an Authorising Officer, a Key Contact and at least one Level 1 User.
4. Apply online, pay the fee and submit supporting documents within 5 working days.

Two things SMEs often miss:

• The licence now lasts 10 years. Renewals were abolished on 6 April 2024, so there is no four-year renewal fee any more.
• You start A-rated, but UKVI can downgrade you to a B-rating (which stops you issuing new CoS) if a compliance visit finds failings. Sponsor duties are real and ongoing: right-to-work checks, reporting changes through the Sponsorship Management System within set deadlines, record-keeping, and being open to announced or unannounced audits.

You qualify for the small/charity rate if you are a registered charity, or if you meet at least two of: annual turnover ≤ £10.2m, balance sheet ≤ £5.1m, or ≤ 50 employees. (The Companies Act size thresholds were uprated for accounting periods from April 2025, so a sponsor near the boundary should confirm which figures the current Home Office guidance applies.)

For each worker you assign a CoS through the system. There are two kinds:

• Defined CoS — for a worker applying from outside the UK; each is approved by the Home Office case-by-case (usually about one working day).
• Undefined CoS — for someone already inside the UK who is switching or extending; drawn from your pre-allocated annual allotment.

The CoS fee is £525 (up sharply from £239 on 9 April 2025) and cannot be passed on to the worker.

The ISC is the biggest employer-only cost and rose +32% on 16 December 2025:

The ISC is waived for dependants, for workers switching from a Student or Graduate visa, for some Global Business Mobility transfers, and for listed PhD-level research occupations. Like the CoS, it cannot be recovered from the worker.

Since 22 July 2025 (when the 2025 Immigration White Paper changes took effect), a Skilled Worker must be paid the higher of £41,700 a year and the going rate for their occupation, and the role must sit at RQF Level 6 (degree level) — up from RQF 3, which removed around 180 occupations from new eligibility. The minimum hourly rate is £17.13.

• New-entrant discount: minimum £33,400 and at least 70% of the going rate, for those under 26, recent graduates, or switching from a Student/Graduate visa.
• Transitional (not the standard route): workers first sponsored before 4 April 2024 can use lower thresholds (from £31,300) and RQF 3–5 roles, but these arrangements are set to end on 22 July 2028.

The worker (or an employer choosing to cover it) pays the visa fee and the Immigration Health Surcharge:

A small sponsor hiring one worker from overseas, no dependants, non-discounted role:

The mandatory employer-only portion (CoS + ISC, plus the one-off licence) is about £2,000 for a three-year hire. A medium/large sponsor pays more: a £1,682 licence and £2,640/£4,400 in ISC. Recovering the CoS, ISC or licence fee from the worker can cost a sponsor its licence.

Two White Paper measures to watch — both still proposed, not yet fully in force as of mid-2026, so check the current Immigration Rules before relying on them:

• Settlement (ILR) qualifying period rising from 5 to 10 years as a new baseline, with an “earned settlement” model that could shorten it for high contributors.
• Adult social-care overseas recruitment has already closed to new entry-clearance applications (from 22 July 2025); in-country workers can extend until 22 July 2028.

If you do not hold a licence — or do not want the multi-week setup and ongoing sponsor duties for a single hire — an Employer of Record can employ the worker through its own UK entity and run compliant UK payroll, PAYE and pensions, while you direct the work. It is the quickest compliant way to place talent in the UK without building your own sponsorship function. Talk to our UK team to compare sponsoring in-house against the EOR route for your situation.