How UK Employers Can Use Discounted Salary Rates to Sponsor Skilled Workers

More than a year has passed since the UK Home Office raised the minimum salary rates for the Skilled Worker visa route.

While last year’s Fragomen blog focused on the discounted rates available for new entrants, this blog explores additional options provided by the Home Office that allow employers to pay a reduced minimum salary rate. These options are not applicable in all cases, but understanding the available options is crucial for employers to access a broader talent pool.

This is even more critical considering the UK Government’s Immigration White Paper, which outlines significant changes to the UK legal migration framework, including suggested further minimum salary increases for the Skilled Worker visa route. Although final details are yet to be confirmed, further clarification is anticipated in the third or fourth quarter of the year.

What is the General Skilled Worker Salary Requirement?

To recap, since April 2024, the general salary requirements for new hires under the Skilled Worker visa route is £38,700 or the occupation code median rate, whichever is higher.

This is the foundational rate and is often quoted in media headlines.

For some skilled employees, this is the minimum salary they must be paid if they do not meet the criteria for any discounted salary rates. Employers should verify salary eligibility carefully before making offers to potential employees who may require sponsorship.

What Discounted Salary Options Are Available?

The Home Office provides several discounted salary rates to address specific sector challenges and business needs. Throughout the past year, sponsors have increasingly used these discounted rates to attract talent and mitigate skills shortages. The following are the available options:

• • • PhD Holders: Sponsors employing individuals who hold a PhD relevant to their job role can benefit from a discounted salary rate. This option supports the UK’s objective of attracting highly educated and skilled professionals. The discount varies depending on the field of study, with greater reductions available to those holding a Science, Technology, Engineering and Mathematics (STEM) PhD.
    • Immigration Salary List (ISL): Formerly known as the Shortage Occupation List, the number of occupation codes listed in the ISL was significantly reduced last year. Most sectors, including engineering and IT, have either negligible or zero codes listed on the ISL. The roles that are on the list can qualify for discounted salary rates, allowing employers greater flexibility to sponsor individuals in roles that are in shortage in the UK. The White Paper suggests abolishing the ISL and replacing it with a Temporary Shortage List for roles below graduate level. This new list proposed by the Home Office will be time-limited and offer conditional sponsorship for roles with workforce shortages in the UK.
    • New Entrants: An attractive option for employers, which is typically used for individuals in the early stages of their career. Those who qualify may be paid a lower salary for up to four years (any time spent on the Graduate visa will be included within this limit). After this period, the general salary rate applies, unless they qualify for another discounted option. Read Fragomen’s blog on New Entrants and the UK immigration landscape published last year for a more detailed overview of the subject.

For some of the above options, employers can pay between 70% and 90% of the standard going rate, subject to meeting certain provisions.

What Are the Transitional Provisions?

Salary thresholds vary depending on when the sponsored worker’s Skilled Worker visa was secured. Those who received their visas before 4 April 2024 and who continue to have valid leave, benefit from transitional provisions. These provisions allow for a lower salary rate when extending or switching to a new role or employer, until 4 April 2030 (including those applying for Settlement).

In such cases, the applicable threshold is generally £29,000 or the 25^th percentile of the going rate for the role, whichever is higher, unless one of the three discounted options above applies, allowing for further reductions. These transitional provisions were introduced to safeguard the positions of those who were already contributing to the UK workforce before the changes took effect.

Looking Ahead

According to the White Paper, the Home Office “will ask the Migration Advisory Committee (MAC) to undertake a thorough review of salary requirements (including discounts).” While the Home Office has expressed an explicit intention to abolish the ISL, it remains to be seen whether revisions will also affect the new entrant and PhD options (if any). Further policy developments are expected as and when the MAC undertakes its review.

How Fragomen Can Help

Fragomen provides comprehensive assessments on eligibility under the Skilled Worker route, including the minimum salary required for specific scenarios. The firm also offers bespoke assistance or training on the discounted salary options, ensuring employers are well equipped to navigate the increasingly challenging UK immigration landscape and attract skilled talent to their business.   

Need to Know More?

For further information or questions related to the UK immigration rules, please contact Associates Ali Ali at [email protected] and Charlotte Roberts at [email protected].

This blog was published on 17 June 2025, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please subscribe to our alerts and follow us on LinkedIn, X, Facebook and Instagram.