Which Immigration Costs Can Employers Recover? 2026 Rules

Section A: Recovering Immigration Costs from Workers

Questions about recovering immigration-related costs arise regularly in the sponsorship context.

Employers may fund visa application fees, Immigration Health Surcharge payments, relocation expenses, training costs, sponsor fees and other expenditure associated with recruiting workers from overseas.

Where significant costs have been incurred, attention often turns to whether those sums can be recovered from the worker.

The legal position is, however, not straightforward. Some costs may potentially be recovered, while others have to be borne by the sponsor and cannot be recouped from the worker.

Recovery rights may also be affected by employment contracts, National Minimum Wage requirements, payroll arrangements and Home Office sponsor guidance.

Also, under the Skilled Worker route, certain payments made by the worker to the sponsor or a related organisation may also be subtracted from salary when the immigration salary requirement is assessed.

Assessing cost recovery is therefore not simply a question of what the employment contract clawback clause says. Employers need to consider the sponsor guidance, the Immigration Rules, employment law, National Minimum Wage requirements and payroll arrangements before looking to recoup immigration-related costs from a sponsored worker.

1. Different Types of Costs Are Treated Differently

It’s important to distinguish between sponsorship costs and personal immigration costs. Certain expenses have to be paid by the sponsor. The Immigration Skills Charge cannot be passed to the sponsored worker. Restrictions also apply to the recovery of sponsor licence fees, Certificate of Sponsorship fees and associated administrative costs, although the applicable prohibition depends on the sponsored route and the relevant date.

Other expenses, such as visa application fees, Immigration Health Surcharge payments and certain relocation costs, may potentially be recoverable under an appropriately drafted agreement. Recovery can nevertheless affect National Minimum Wage compliance and, under the Skilled Worker route, may reduce the salary recognised for immigration purposes.

2. Classifying Costs Before Recovery

Employers should maintain a cost schedule identifying which expenses the organisation will bear, which may potentially be recovered and which are prohibited from recovery. Contracts, repayment agreements and payroll instructions should use the same classifications.

Where different business units recruit sponsored workers, a central schedule reduces the risk of prohibited sponsorship fees being included within broader visa, relocation or training clawbacks.

Section B: Sponsorship Costs Employers Cannot Recover

Home Office sponsor guidance identifies specific sponsorship costs that must be paid by the sponsor and must not be recouped from a sponsored worker. The scope of the prohibition depends on the type of fee, the sponsored route and, in some cases, the date on which the CoS was assigned or recovery was attempted.

Where a prohibition applies, the sponsor must not recoup or attempt to recoup the relevant fee or associated administrative costs by any means. The restriction therefore covers direct repayment requests, payroll deductions, loans, contractual clawbacks and indirect arrangements designed to transfer the cost to the worker.

1. Immigration Skills Charge

The Immigration Skills Charge cannot be passed to, or recouped from, any sponsored worker for whom the sponsor is required to pay the charge.

The charge may be payable when a sponsor assigns a CoS to a Skilled Worker or Senior or Specialist Worker, subject to the exemptions set out in the sponsor guidance.

The sponsor must not pass on or attempt to recoup any part of the charge through a repayment clause, payroll deduction, loan, separate payment or indirect arrangement. Where the Home Office establishes prohibited recovery, it will normally revoke the sponsor licence.

2. Certificate of Sponsorship Fees and Associated Administrative Costs

The sponsor is responsible for paying the CoS fee. The prohibition on recovering that fee from the worker applies according to the route and the date on which the CoS was assigned.

For Skilled Workers, sponsors must not recoup or attempt to recoup any part of the CoS fee or associated administrative costs where the CoS was assigned on or after 31 December 2024.

For workers sponsored under a Global Business Mobility route, Minister of Religion, International Sportsperson, Scale-up or Seasonal Worker route, the equivalent prohibition applies where the CoS was assigned on or after 9 April 2025.

The restriction applies by any means and is not limited to payroll deductions. A broad repayment clause referring to sponsorship, visa or recruitment costs may therefore create a breach if it includes a prohibited CoS fee or associated administrative cost.

3. Sponsor Licence Fees and Associated Administrative Costs

The sponsor licence fee, including the fee for adding a route to an existing licence, must be paid by the sponsoring organisation. Restrictions also apply to associated administrative costs connected with that fee.

For the Skilled Worker route, the sponsor must not recoup or attempt to recoup the sponsor licence fee or associated administrative costs from a worker where recovery is attempted on or after 31 December 2024. For all other Worker and Temporary Worker routes, the equivalent prohibition applies where recovery is attempted on or after 9 April 2025.

4. Disguised Sponsorship Cost Recovery

A breach does not depend on the sponsor expressly describing a payment as reimbursement of a prohibited sponsorship fee.

UKVI may examine the substance of any payment imposed on a sponsored worker. Risk can arise where a prohibited licence, CoS or ISC cost is incorporated into an administration charge, sponsorship contribution, compliance fee, loan, recruitment package or wider repayment agreement.

The description used in the contract or payroll record will not determine the position. The relevant question is what cost the worker is ultimately being required to bear.

The same risk can arise where payment is routed through a recruitment agent, group company or other intermediary. Sponsors should not assume that a prohibited cost becomes recoverable merely because the payment is made to a third party rather than directly to the sponsor.

5. Why These Costs Create Elevated Compliance Risk

Recovery or attempted recovery of a prohibited sponsorship cost is a sponsor compliance breach, not simply a private repayment dispute between employer and worker.

The issue may come to UKVI’s attention through a compliance check, worker complaint, payroll evidence, repayment documentation, tribunal proceedings or another investigation. Once identified, the Home Office may examine the sponsor’s wider recruitment, payroll and sponsorship arrangements to determine whether the practice is isolated or systemic.

The amount recovered is not determinative. A breach can arise from an attempt to recover any part of a fee covered by the prohibition. The guidance states that the Home Office will normally revoke the sponsor licence where prohibited recovery of an ISC, relevant CoS fee, sponsor licence fee or associated administrative cost is established.

Older repayment agreements should not be treated as automatically compliant because they were signed before the current prohibitions took effect. The relevant rule may depend on when the CoS was assigned or when recovery was sought, rather than the date on which the agreement was originally drafted.

Section C: Costs Employers May Potentially Recover

Not all immigration-related expenditure falls within the Home Office prohibitions on recovering the Immigration Skills Charge and specified sponsor licence and CoS fees. Costs incurred for the worker’s own application, dependants or relocation may potentially be covered by a repayment agreement.

Falling outside those prohibitions does not create an automatic right of recovery. The agreement must be enforceable, any wage deduction must be separately authorised and the arrangement must comply with National Minimum Wage rules.

For Skilled Worker applications, certain payments made to the sponsor or a related organisation may also be subtracted when salary is assessed. That issue is considered in Section E.

1. Visa Application Fees & Immigration Health Surcharge

Visa application fees are not included within the specific sponsor-guidance prohibitions applying to the Immigration Skills Charge and relevant sponsor licence and CoS fees.

Where an employer pays the worker’s visa application fee, the parties may agree that some or all of the cost will become repayable in specified circumstances, such as the worker resigning within a defined period. The agreement should identify the actual fee paid, the event triggering repayment and any reduction in the amount due over time. The arrangement must also be assessed under wage deduction and National Minimum Wage rules.

The Immigration Health Surcharge is payable as part of the individual’s immigration application and is not included within the specific sponsor-fee recovery prohibitions.

An employer may choose to pay the IHS and include the cost within a repayment agreement. Any clause should identify whose surcharge has been paid, the amount funded and the circumstances in which repayment becomes due.

The contractual, wage deduction and National Minimum Wage position should be checked before recovery is sought.

2. English Language Tests, Ecctis Assessments and Medical Screening

A worker may incur additional costs in meeting the evidential and eligibility requirements for an immigration application.

These costs may include an approved English language test, an Ecctis assessment and tuberculosis screening where required. They do not fall within the specific prohibitions on recovering the ISC or relevant sponsor licence and CoS fees, although the precise nature of each cost should be checked before it is included in a repayment agreement.

Where the employer pays these costs, repayment may potentially be agreed.

3. Dependant Immigration Costs

Visa application fees, Immigration Health Surcharge payments and related application costs for a worker’s partner or children are not included within the specific sponsor-fee recovery prohibitions.

Where an employer funds dependant costs, the repayment agreement should distinguish those amounts from the worker’s own application costs. It should also specify whether repayment is triggered by the worker’s departure, the dependant’s circumstances or another defined event.

The agreement should also address any Home Office refund received after a refusal, withdrawal or variation of the application.

4. Relocation Expenses

Relocation packages may include flights, temporary accommodation, shipping and other expenditure associated with moving to the UK.

Repayment may be agreed where the worker leaves within a defined period. A reducing schedule is generally more defensible than requiring repayment of the full amount throughout the clawback period because it reflects the employer’s diminishing financial interest over time.

The amount claimed should be linked to identifiable expenditure rather than an arbitrary sum intended primarily to deter resignation. Employers should also consider the reason employment ended and avoid applying the same repayment trigger indiscriminately to resignation, redundancy, dismissal and termination by the employer.

A deduction or payment may reduce National Minimum Wage pay where the expense was imposed in connection with the employment or the recovery is for the employer’s own use and benefit. The treatment depends on the nature of the expenditure and the repayment arrangement.

5. Employer Loans

An employer may fund immigration or relocation costs through a genuine loan. Repayment of a genuine advance will not normally reduce National Minimum Wage pay, provided it is not a device for recovering an employment-related charge.

A different result can arise under the Skilled Worker rules, where loan repayments connected with immigration or business costs may reduce the salary recognised in a later application. The loan agreement and supporting payment records should therefore be retained.

6. Recovery Rights Are Not Unlimited

The fact that a cost falls outside the express sponsor-fee recovery prohibitions does not make a repayment clause automatically lawful or enforceable.

Employers must consider the wording of the repayment obligation separately from the authority to make deductions from wages. They must also assess National Minimum Wage treatment, the calculation of the amount due, the event triggering repayment and any applicable refund. A signed clause will not cure a prohibited charge or prevent a deduction from reducing National Minimum Wage pay.

Employers should therefore assess both the underlying cost and each proposed recovery method before entering the agreement or instructing payroll.

Section D: Training Costs, Clawback Clauses and Employment Law Risks

Training costs require a fact-specific assessment. They do not fall automatically within the Home Office prohibitions applying to the Immigration Skills Charge and relevant sponsor licence and CoS fees, but that does not make every training charge recoverable. The position depends on the nature and purpose of the training, the contractual terms, the method of recovery and the effect on National Minimum Wage and Skilled Worker salary calculations.

Training clawbacks engage separate contractual, wage deduction and National Minimum Wage tests. A clause may create a valid debt without giving the employer lawful authority to deduct the sum from wages, while an agreed charge may still reduce National Minimum Wage pay.

1. Professional Qualifications and Optional Development

Employers may fund professional qualifications, technical certifications and optional development that gives the worker a transferable skill or qualification.

A clawback is generally more defensible where it is linked to identifiable expenditure, concerns training that provides a genuine benefit to the worker and reduces over a reasonable period. The agreement should identify the course, provider, actual cost, repayment trigger and amount due at each stage.

The amount recoverable should remain connected to the employer’s actual financial exposure. A sum that materially exceeds the cost incurred, or remains payable in full after the employer has received a substantial period of service, requires particular justification and may be vulnerable under the penalty doctrine.

National Minimum Wage has to be considered separately. A charge for a qualification that the worker was independently required to hold as a prerequisite for obtaining the employment will not normally reduce National Minimum Wage pay. Where the requirement is imposed by the employer and arises from the employment, the charge will reduce National Minimum Wage pay. As such, classification depends on the facts rather than the title given to the course.

2. Mandatory Workplace Training

Greater risk arises where training is required by the employer, required to perform the role or necessary to meet the employer’s legal, regulatory or operational obligations.

Examples include health and safety training, safeguarding, mandatory compliance programmes and employer-required induction. A deduction or payment for training required in connection with the employment will generally reduce National Minimum Wage pay. Time spent completing training required by the employer may also count as working time for minimum wage purposes.

A contractual right to recover the cost does not disapply the National Minimum Wage rules. Employers must test the charge against the worker’s pay in the relevant pay reference period and should not assume that recovery becomes harmless because it is deferred until employment ends.

3. Induction, Integration and Cultural Training

Sponsors may provide cultural orientation, language support, induction and workplace integration programmes to overseas recruits.

The label given to the programme is not determinative. A genuine external course chosen for the worker’s personal benefit may be treated differently from compulsory induction, ordinary onboarding or training required to perform the sponsored role. Charges connected with employer-required induction or employment will generally reduce National Minimum Wage pay.

Describing recruitment, induction or compliance expenditure as training does not change its legal treatment. Employers should retain invoices, course information and evidence of what was provided before including the cost in a clawback clause.

4. Drafting Enforceable Clawback Clauses

The drafting must identify both the underlying cost and the circumstances in which repayment becomes due.

A clawback clause should identify the specific course or expenditure, the actual amount funded, the repayment trigger, the applicable time period, any reducing scale and the treatment of refunds or cancellations. It should also distinguish between resignation, dismissal, redundancy and termination by the employer.

Prohibited sponsorship fees must not be combined with potentially recoverable immigration, relocation or training expenditure. Separate schedules should be used so the employer can identify the legal basis, amount and recovery rules applying to each cost.

A contractual obligation to repay does not automatically authorise a deduction from wages. The employment contract or separate written agreement must provide the required legal basis before payroll makes a deduction, unless another statutory exception applies.

5. Penalty Clauses and Disproportionate Clawbacks

Employers may use clawback provisions to protect a legitimate financial interest in training expenditure. The clause should not impose a detriment out of proportion to that interest or operate principally as a punishment for resignation.

Risk increases where the sum materially exceeds the employer’s expenditure, remains payable in full for an extended period or applies regardless of the reason employment ends. The enforceability assessment will depend on the employer’s legitimate interest and whether the financial consequence imposed on the worker is proportionate to that interest.

Clawbacks are generally more defensible where they reflect identifiable costs, reduce over a reasonable period and do not apply indiscriminately to resignation, redundancy, ill health, dismissal and employer-initiated termination.

A substantial clawback may also be challenged where its practical effect is to prevent the worker from leaving employment or moving to a competitor. The issue will depend on the amount, duration and commercial effect of the provision rather than its title.

6. Recovery After Employment Ends

The end of employment does not remove the need to assess National Minimum Wage and wage deduction rules.

A deduction from final salary still requires lawful authority under the Employment Rights Act 1996. Where a worker makes a payment within one calendar month after the last day of employment, the payment may also be allocated to the final pay reference period for National Minimum Wage purposes.

Mandatory training costs recovered shortly after termination can therefore create a retrospective minimum wage underpayment. Employers should complete the calculation before deducting from final pay or demanding payment immediately after employment ends.

7. Reviewing Existing Clawback Agreements

Existing clawback agreements may pre-date the current prohibitions on recovering specified sponsor licence fees, CoS fees and associated administrative costs, as well as the introduction of paragraph SW 14.2A.

Older agreements may combine sponsorship fees, immigration application costs, training expenditure and recruitment charges within one repayment schedule. Recovery or attempted recovery under that wording may breach the sponsor guidance if a prohibited fee is included, even where the agreement was signed before the prohibition took effect.

Existing agreements should be reviewed against the current fee-recovery rules, section 13 wage deduction requirements and National Minimum Wage treatment. Payroll instructions should also be checked because a valid contractual debt does not by itself authorise a deduction from wages.

Section E: Payroll Deductions, Salary Compliance and Home Office Scrutiny

Identifying a cost that may potentially be recovered is only the first stage. Employers must also assess how repayment will be made, including through payroll deductions, a separate payment, a loan repayment or a deduction from final salary. Each method can produce a different result under employment law, National Minimum Wage legislation and the Immigration Rules.

The same arrangement may engage several separate tests. A payment can be contractually due but unlawfully deducted from wages, reduce National Minimum Wage pay or be subtracted from the salary recognised under Appendix Skilled Worker. Those questions must be answered separately.

1. Repayment Obligations and Wage Deductions Are Separate

A repayment clause does not automatically give an employer the right to deduct money from wages.

Under section 13 of the Employment Rights Act 1996, a deduction will generally require statutory authority, a relevant contractual term notified to the worker in writing before the deduction or the worker’s prior written consent. A contractual obligation to repay does not necessarily authorise payroll to deduct the amount from wages. The contract or a separate written agreement must contain clear deduction authority that was provided to the worker before the deduction is made.

Repayment agreements, employment contracts and payroll instructions should therefore be checked together. Where authority to deduct is absent, the employer may need to pursue the amount as a contractual debt rather than remove it from salary. Any deduction must also be tested separately under National Minimum Wage rules.

The same rules apply to deductions from final salary. The end of employment does not create an automatic right to deduct an outstanding clawback, even where the worker accepts that a repayment obligation exists.

2. How Recovery Affects National Minimum Wage Pay

National Minimum Wage treatment depends on the reason for the deduction or payment, who receives the benefit and the pay reference period to which it relates.

Deductions or payments for the employer’s own use and benefit, or for expenditure connected with the employment, will generally reduce pay for National Minimum Wage purposes. The worker’s contractual agreement does not prevent that reduction. A payment may therefore produce an underpayment even where the deduction is authorised under the Employment Rights Act 1996.

The calculation must be completed for each affected pay reference period. Spreading recovery across several months may reduce the amount attributed to each period, but it does not change the legal character of the payment. Employers should also account for all working time when checking the worker’s effective hourly rate.

Repayment of a genuine loan or advance will not normally reduce National Minimum Wage pay. The arrangement must represent a genuine advance made to or for the worker, rather than a device for transferring employer or employment-related expenditure. This should not be assumed where the purported loan merely disguises a charge for employer-required expenditure.

3. Skilled Worker Salary Assessment

Sponsors must pay sponsored workers in accordance with the applicable route requirements and the information recorded on the CoS. Relevant changes to salary or working arrangements may also need to be reported through the Sponsorship Management System.

A separate calculation applies when salary is assessed as part of a Skilled Worker application. Under paragraph SW 14.2A, salary deductions, loan repayments and investments paid to the sponsor or a related organisation are generally subtracted where they relate to immigration costs, business costs or investment.

Relevant payments are averaged across the sponsorship period stated on the CoS. A one-off repayment can therefore affect the salary recognised across that period, rather than only in the month when the payment is made.

An exception applies where the payment is unrelated to immigration costs, business costs or investment and the worker genuinely chooses an additional benefit.

A genuinely optional salary sacrifice arrangement for an additional benefit may fall within that exception, provided it is unrelated to immigration costs, business costs or investment. Repayments of visa fees, IHS costs or sponsor-related loans will not.

Contractual salary, National Minimum Wage pay and salary recognised for a Skilled Worker application are separate calculations. Employers should assess each before implementing a recovery arrangement.

4. Evidence UKVI May Examine

A repayment arrangement may come to UKVI’s attention through a compliance check, worker complaint, payroll information, documents obtained during an investigation or information arising from other proceedings.

UKVI may examine the employment contract, CoS, payslips, bank payment evidence, loan or clawback agreement, payroll instructions and records showing the purpose of payments made by the worker. It may also consider whether the arrangement forms part of a wider recruitment or sponsorship practice.

The amount involved is not the only consideration. A small payment can still evidence prohibited fee recovery or a National Minimum Wage underpayment and may affect the salary recognised in a Skilled Worker application.

5. Cost Recovery Scenarios Requiring Particular Care

Greater legal risk arises where the cost is described broadly, different categories of expenditure are combined or payroll is instructed to deduct an amount without completing the employment law, National Minimum Wage and immigration salary checks.

a. Payroll deductions for recoverable costs

Payroll deductions require prior authority under section 13 of the Employment Rights Act 1996. The employer must then calculate the effect on National Minimum Wage pay. Spreading deductions across several months may change the amount attributed to each pay period but does not alter the nature of the cost.

b. Recovery from final salary payments

An outstanding contractual debt cannot automatically be deducted from final salary. Payroll must establish the authority required under section 13 of the Employment Rights Act 1996 and complete the National Minimum Wage calculation for the final pay reference period.

c. Care sector recruitment and repayment arrangements

Care providers can face heightened practical exposure where overseas recruitment involves low or variable pay, recruitment intermediaries, mandatory training, accommodation charges or repayments linked to sponsorship. The same legal rules apply across sectors, but these features can make National Minimum Wage and sponsored salary shortfalls more likely and may expose prohibited fee recovery or worker exploitation concerns.

6. Identifying and Correcting a Problem

Where a sponsor identifies a prohibited charge, unauthorised deduction, National Minimum Wage underpayment or payment that may affect a Skilled Worker salary assessment, recovery activity should be paused while the position is assessed.

The employer should identify each cost, repayment and affected worker, repay prohibited or unauthorised sums, correct any National Minimum Wage underpayment and assess the effect on relevant Skilled Worker applications. Relevant payroll records, contracts, CoS details and bank payments should be reconciled.

A separate assessment may be required to determine whether a salary or employment change must be reported through the Sponsorship Management System and whether disclosure to the Home Office is appropriate. Remediation should be legally reviewed before reports or explanations are submitted because correcting payroll does not necessarily remove an earlier sponsor compliance breach.

Summary

Immigration clawback clauses can help employers recover certain costs where a worker leaves early, but enforceability depends on more than the wording of the agreement. The employer first has to identify which costs can lawfully be recovered, which must remain with the sponsor and how the repayment terms operate in practice.

Prohibited sponsor costs cannot be made recoverable by reducing the amount, spreading repayment over time or combining them with other expenditure. Recoverable costs should be clearly itemised, supported by evidence and linked to a proportionate repayment scale that reduces over time.

Employers also need to consider how recovery will be made. A signed agreement does not automatically authorise a wage deduction, and each deduction must be checked against the contractual terms, National Minimum Wage rules and the worker’s final pay. Certain repayments to the sponsor may also affect the salary recognised in a future Skilled Worker application.

Training costs require particular care. The employer should be able to show what the training covered, who benefited and how the repayment figure was calculated. Training expenditure should also be separated from immigration fees to avoid creating both enforcement problems and sponsor licence risk.

A reliable clawback arrangement therefore requires coordinated input from HR, payroll and immigration compliance. Employers should review existing clauses against current Home Office rules before relying on them or making any deduction.

Need Assistance?

DavidsonMorris immigration solicitors advise UK employers on sponsor licence compliance, immigration risk and employment law. For advice on sponsorship cost recovery, clawback clauses, payroll deductions or Home Office compliance, book a fixed-fee telephone consultation with one of our specialist solicitors.

FAQs

Can an employer recover visa fees from a sponsored worker?

Potentially, yes. An employer may recover worker visa fees under a valid clawback clause, provided the terms are proportionate and exclude prohibited sponsorship costs.

Can an employer recover the Immigration Health Surcharge?

Potentially, yes. An employer may fund the Immigration Health Surcharge and agree that some or all of the cost will become repayable in defined circumstances. The agreement should identify the amount funded, whose surcharge was paid and the applicable repayment trigger.

Can employers recover the Immigration Skills Charge?

A sponsor must not pass on or attempt to recoup any part of the Immigration Skills Charge from the sponsored worker, whether through direct repayment, payroll deductions, loans or another arrangement. Where prohibited recovery is established, the Home Office will normally revoke the sponsor licence.

Can employers recover Certificate of Sponsorship fees?

Not where the relevant route and date prohibition applies. For Skilled Workers, sponsors must not recoup or attempt to recoup the CoS fee or associated administrative costs where the CoS was assigned on or after 31 December 2024. The equivalent prohibition applies to specified additional sponsored routes for CoS assigned on or after 9 April 2025. A breach will normally result in sponsor licence revocation.

Can training costs be recovered from sponsored workers?

Some training costs may potentially be recovered, particularly where the employer has funded an identifiable professional qualification or optional development that benefits the worker. The position depends on the nature of the training, the amount claimed, the repayment trigger and the contractual wording. Employer-required training carries greater National Minimum Wage and enforceability risk.

Can employers deduct immigration costs directly from salary?

Not automatically. Under section 13 of the Employment Rights Act 1996, a deduction will generally require statutory authority, a relevant contractual term notified to the worker in writing before the deduction or the worker’s prior written consent. The contract or a separate written agreement must contain clear deduction authority that was provided to the worker before the deduction is made.

Can repayment clauses affect sponsor licence compliance?

A repayment clause can breach sponsor guidance if it includes a prohibited Immigration Skills Charge, sponsor licence fee, relevant CoS fee or associated administrative cost. For Skilled Workers, deductions, loan repayments and investments paid to the sponsor or a related organisation may also reduce the salary recognised under SW 14.2A.

Glossary

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