Section A: What is the Immigration Skills Charge?
The Immigration Skills Charge (ISC) is a fee payable by most UK employers when sponsoring skilled workers from overseas under certain visa routes, such as the Skilled Worker or the Senior or Specialist Worker visas, with limited exemptions. It was introduced on 6 April 2017 under the Immigration Skills Charge Regulations to address the domestic skills gap. The charge is a strategic measure designed as a disincentive to employers for hiring overseas workers, with a view to making the option of investing in training and developing UK settled workers instead.
The funds raised from the ISC are directed to the Department for Education to support investment in the development of skills and training and to address the skills gap in the UK’s domestic labour market. Since all UK employers are required to have a sponsor licence to employ migrant workers since 1 January 2021 under certain work visa routes, the charge has become payable by a greater number of businesses.
The amount payable depends on the size of the sponsoring organisation and the length of the worker’s employment. Exemptions apply in certain cases, such as for PhD-level roles or workers switching to a Skilled Worker visa within the UK. Employers will need to carefully review eligibility to determine when an exemption may be available.
Failing to pay the charge in full can result in delays or rejection of a worker’s visa application, potentially disrupting recruitment plans. Employers therefore need to budget for the ISC alongside other sponsorship costs.
1. When does the Immigration Skills Charge apply?
The ISC applies where an employer is hiring a skilled migrant to work in the UK under one of the following visa routes, unless an exemption applies:
- Skilled Worker visa – this category enables employers to recruit non-UK and non-Irish nationals in qualifying roles.
- GBM Senior or Specialist Worker visa – this category enables overseas employers to transfer existing employees to UK-based operations.
The ISC does not apply where the worker is applying from outside the UK for leave of less than six months. However, if applying from within the UK, the ISC is payable regardless of the length of leave requested.
The ISC is also payable if the employer wishes to extend the employment of a sponsored worker for a further limited period, and assigns a new Certificate of Sponsorship.
Sponsors are not liable for the ISC for any of the worker’s dependants.
2. When does the employer pay the Immigration Skills Charge?
The Immigration Skills Charge is payable each time the sponsor assigns a Certificate of Sponsorship to someone applying for a Skilled Worker or Senior or Specialist Worker visa.
The charge has to be paid before the worker’s visa application will be processed by the Home Office. The visa application will not progress until the ISC has been paid in full.
If the individual already works for you and is changing job within your organisation to a role with a different occupation code, you will need to assign a new CoS which is used to apply for a new visa. The Immigration Skills Charge must cover the full validity of the worker’s visa. As such, a new visa with a longer validity must be covered by paying additional ISC to cover the extra period of leave. This also means additional ISC will not be payable if the new CoS does not extend the time on the worker’s visa.
3. Failure to pay the Immigration Skills Charge
When you assign a Certificate of Sponsorship to the worker, you must pay the ISC in full and as one payment. This is a mandatory requirement.
Failure to comply risks delaying the applicant’s visa application at the Home Office. Non-payment of the ISC will result in refusal of the application.
In the event the employer assigns a Certificate of Sponsorship but fails to pay the Immigration Skills Charge, the certificate will be rendered invalid for as long as that payment obligation remains outstanding.
The Home Office should issue a payment reminder to the sponsor for the charge. If the full charge is not settled within 10 working days of the first formal reminder, the visa application will be refused.
DavidsonMorris Strategic Insight
For employers, the ISC is just another fee. There is no direct benefit or service in exchange for the outlay, and it simply has to be treated as a mandatory cost for sponsors that are within scope. So if you are caught by the charge, your hiring budget and cost of overseas recruitment have to factor it in.
Section B: How much is the Immigration Skills Charge?
In its Immigration White Paper, published on 12 May 2025, the Government confirmed that the ISC would be increasing by 32% on current levels. The timing of the increase is yet to be confirmed.
Under the current rules, the Immigration Skills Charge is set at two levels:
- Large employer charge: £1,000 per sponsored worker for the first 12 months, with an additional £500 per subsequent 6-month period of leave
- Small employer or charities charge: £364 per sponsored worker for the first 12 months of leave, plus £182 for each additional 6 months of leave
For a medium or large-sized business, the ISC is £1,000 per sponsored employee per year. For each additional 6 months the worker is sponsored, an additional £500 in ISC is payable. If the worker will be in the UK for longer than 6 months but less than a year, the first full 12 month period must be paid for.
For smaller businesses or charitable organisations, a lower ‘small charge’ rate of £364 applies for the first 12 months, followed by £182 for subsequent 6 month periods of employment.
The total ISC payable will depend on the size and type of sponsor on the date the CoS is assigned and the length of employment stated on the CoS.
The full charge amount will be calculated automatically using the dates provided by the employer as part of the sponsorship process.
Period of employment stated on CoS | Large charge total ISC payable | Small charge total ISC payable |
| 12 months or less | £1,000 | £364 |
| More than 12 months but no more than 18 months | £1,500 | £546 |
| More than 18 months but no more than 24 months | £2,000 | £728 |
| More than 24 months but no more than 30 months | £2,500 | £910 |
| More than 30 months but no more than 36 months | £3,000 | £1,092 |
| More than 36 months but no more than 42 months | £3,500 | £1,274 |
| More than 42 months but no more than 48 months | £4,000 | £1,456 |
| More than 48 months but no more than 54 months | £4,500 | £1,638 |
| More than 54 months but no more than 60 months | £5,000 | £1,820 |
1. Which fee – the large charge or small charge?
Employers will need to determine whether they are classed as a small or large company, and pay the appropriate fee.
To qualify as a small sponsor, an organisation typically needs to satisfy at least two of these conditions: an annual turnover of no more than £10.2 million, total assets valued at £5.1 million or less, or a workforce of 50 or fewer employees. For charitable sponsor status, the organisation must be a registered charity in England or Wales, Scotland, or Northern Ireland, with unregistered Northern Irish charities providing evidence of their charitable tax status from HMRC. Other qualifying charitable entities include excepted charities, exempt charities, and ecclesiastical corporations set up for charitable objectives.
Companies that do not come within the criteria of a small business should pay the large charge.
Where the employer has assigned a CoS to a migrant and erroneously pays the small business or charitable organisation fee, but the large charge should apply, the Home Office will request a ‘top up’ charge to cover the difference. This will apply provided the employer notified the Home Office prior to assigning the CoS that it no longer qualified as a small or charitable organisation.
A top-up charge will also be requested in any other circumstances where the sponsor has not paid the full ISC amount.
2. How to calculate the ISC
The ISC is not simply applied on an annual rolling basis. Instead, the amount is calculated upfront when the Certificate of Sponsorship (CoS) is assigned, based on the total length of employment stated on the CoS. The minimum charge covers the first 12 months of sponsorship. If the worker’s employment is set to continue beyond 12 months, the Home Office will then add further blocks of six months to the calculation.
For example, if an employer assigns a CoS for two years, the system will automatically charge £2,000 for a medium or large sponsor, or £728 for a small or charitable sponsor. If the CoS states 18 months, the charge is £1,500 or £546. Where a worker is sponsored for less than 12 months but more than six months, the full 12-month charge still applies. This is why careful attention to the period of sponsorship is so important, as the CoS duration directly determines the ISC amount payable.
Examples include:
| CoS duration | Large sponsor ISC | Small/charitable sponsor ISC |
|---|---|---|
| 6–12 months | £1,000 | £364 |
| 13–18 months | £1,500 | £546 |
| 19–24 months | £2,000 | £728 |
| 25–30 months | £2,500 | £910 |
| 31–36 months | £3,000 | £1,092 |
| 37–42 months | £3,500 | £1,274 |
| 43–48 months | £4,000 | £1,456 |
| 49–54 months | £4,500 | £1,638 |
| 55–60 months | £5,000 | £1,820 |
The charge must be paid in full at the time of assigning the CoS, and payment cannot be split or deferred. Employers therefore need to forecast staffing requirements accurately and be precise when entering CoS start and end dates, as even small errors can trigger additional costs or the need for refunds.
3. Other visa sponsorship costs
In addition to the Immigration Skills Charge, there are various other costs you will be liable for each worker you sponsor a worker. These include the sponsorship licence application fee, which for medium or large sponsors is £1,579, while the fee for small or charitable sponsors is £574. The Certificate of Sponsorship fee is also payable when assigning a CoS, at £525, or £55 for workers under the Temporary routes.
The visa application fee will depend on where the application is being made and whether priority services are used. Other costs to consider include relocation and legal costs and the Immigration Health Surcharge.
Fees are subject to change and you are advised to check the most recent rates at the time of making any applications.
DavidsonMorris Strategic Insight
Sponsors often miscalculate, thinking of the ISC as annual, when in reality the system calculates the charge upfront for the full CoS period in yearly and six-month blocks. If you have several sponsored workers, you risk serious cumulative expense exposure if finance teams are not fully briefed.
Section C: Immigration Skills Charge Exemptions
There are limited exemptions to the Immigration Skills Charge. Employers should carefully assess each sponsorship scenario to determine ISC liability and ensure compliance with the latest regulations.
A sponsor will not be liable to pay for the Immigration Skills Charge in the following circumstances:
1. Sponsoring under a specific occupation code
Employers are exempt from paying the ISC when sponsoring workers in the following roles:
- Chemical scientists (2111)
- Biological scientists (2112)
- Biochemists and biomedical scientists (2113)
- Physical scientists (2114)
- Social and humanities scientists (2115)
- Natural and social science professionals not elsewhere classified (2119)
- Research and development managers (2161)
- Other researchers, unspecified discipline (2162)
- Higher education teaching professionals (2311)
Note that PhD-level roles are as defined in Appendix Skilled Occupations, since SOC codes are subject to change.
2. Workers switching from study routes
Employers are exempt from paying the ISC when sponsoring individuals who are switching from a student visa to a Skilled Worker or Senior or Specialist Worker visa within the UK. This exemption continues to apply if the individual extends their stay in the same role with the same sponsor.
3. Global Business Mobility: Senior or Specialist Worker Route (EU Nationals)
Effective from 1 January 2023, an exemption applies to employers sponsoring EU nationals (or individuals holding a Latvian non-citizen’s passport) under the Global Business Mobility: Senior or Specialist Worker route, provided:
- The Certificate of Sponsorship (CoS) is assigned on or after 1 January 2023.
- The worker is being sponsored to work in the UK for up to three years.
- The worker is an EU national or holds a Latvian non-citizen passport.
- The worker currently works at one of the sponsor’s offices in the EU or for a linked business in the EU.
4. Assignments prior to 6 April 2017
If a worker was assigned a CoS before 6 April 2017 and has continuously held a skilled worker visa since then, the sponsoring employer is exempt from paying the ISC for that worker.
5. Short-term assignments
The ISC is not payable for workers seeking entry clearance to the UK for less than six months.
6. Extensions without additional time
If an employer assigns a further CoS to a worker without extending the original end date of their permission, for example, when switching occupation codes within the same organisation, the ISC is not payable.
DavidsonMorris Strategic Insight
Sponsors will naturally look to qualify for an exemption, but these are limited and strictly enforced. Exemption claims are high-risk and attract Home Office scrutiny, so you will have to strongly evidence any such claim. Getting this wrong can result in top-up demands and possibly accusations of misrepresentation.
Section D: Immigration Skills Charge Refunds
In limited circumstances, the employer may be able to apply for a full or partial refund of the Immigration Skills Charge.
If the worker’s visa application is refused by the Home Office, or withdrawn by the applicant, they may be eligible for a refund. Similarly, if the visa application is successful but the worker does not take up the sponsored employment, a refund should be issued.
Partial refunds may also be available where the sponsored worker:
- Starts working for the employer but then changes to another sponsor, or
- Is granted less time on their visa than you sponsored them for, or
- Leaves their job with the sponsor before the end date on their Certificate of Sponsorship.
If the employer paid the higher ‘large charge’ instead of the small charge, they can be refunded the difference.
Refunds are usually processed automatically via SMS within 90 days once the Home Office has been notified of the relevant change, such as early termination or unused CoS.
There will be no refund payable where:
- The worker changes job but remains employed by the same sponsor.
- The worker’s leave is curtailed due to a breach of the conditions of their leave, either through their own actions or those of their sponsor.
Refunds of the ISC will be processed automatically via the Sponsorship Management System (SMS) typically:
- Within 90 days of the sponsor reporting the migrant’s change in circumstances
- Within 90 days after the expiry of a Certificate of Sponsorship that has not been used
- Within 90 days of the date of the worker’s visa application being refused or withdrawn (including any application for administrative review)
- Within 90 days of assigning the CoS if notifying you have became a small or charitable sponsor
If the refund has not been received after 90 days, the employer should contact the Home Office.
DavidsonMorris Strategic Insight
Refunds are only available in limited scenarios and usually not for the first year of sponsorship. Even when eligible, it’s sensible not to rely on refunds in business cases or budgets as sponsors often wait months for the funds to come through.
Section E: Can the sponsor pass on the Immigration Skills Charge to the employee?
The Immigration Skills Charge is expressly payable by the sponsoring employer. Home Office guidance makes clear that the fee must not, under any circumstances, be transferred to the sponsored worker. This means the employer cannot seek repayment either directly, for example through a salary deduction or repayment clause, or indirectly, such as by requiring the worker to sign an agreement to reimburse the charge at a later stage. The obligation to pay rests entirely with the employer and is part of the overall financial commitment of holding a sponsor licence.
The policy behind this restriction is significant. The charge was introduced to encourage employers to prioritise training and development of the domestic workforce rather than relying heavily on overseas recruitment. If employers were permitted to recover the cost from migrant workers, the purpose of the charge would be undermined. The Home Office therefore treats attempts to shift the burden to the worker as a serious breach of sponsorship duties.
In practice, this means employers need to budget carefully for the Immigration Skills Charge alongside other sponsorship-related costs, such as the Certificate of Sponsorship fee, visa application fees and the Immigration Health Surcharge. These costs are recognised by the Home Office as part of the responsibility of employing a sponsored worker. Employers who attempt to offload them risk being found non-compliant.
Where the Home Office identifies that the ISC has been passed on to the worker, whether through direct repayment requirements or disguised arrangements, enforcement action can follow. This may include downgrading the sponsor licence rating, suspending the licence pending investigation or in the most serious cases revoking the licence altogether. Revocation would curtail all sponsored workers’ visas and immediately impact the organisation’s ability to sponsor migrant employees. The risks are therefore significant, both financially and operationally, for any employer found in breach of this rule.
The rule also applies consistently across all sponsored work routes where the ISC is payable, meaning there are no exceptions based on sector, role, or the level of the sponsored worker. Employers must therefore ensure their recruitment practices, contracts of employment, and internal reimbursement policies do not inadvertently create exposure under this requirement.
DavidsonMorris Strategic Insight
The rules are clear that sponsors must not pass on or try to recover the ISC from sponsored workers. Clawback arrangements in contracts or repayment clauses will be scrutinised. The Home Office treats this as a serious breach and will penalise accordingly. Employers are expected to absorb the ISC as a cost of doing business and never pass it on.
Section F: Summary
The Immigration Skills Charge remains a significant cost consideration for UK employers who rely on sponsored workers. With strict rules on when the charge applies, limited exemptions and firm restrictions preventing employers from passing the cost to workers, compliance is non-negotiable. Failure to pay in full or attempts to claw back the fee from employees expose businesses to enforcement risks, including visa refusals and potential sponsor licence revocation. Employers therefore need to factor the ISC into their workforce planning and budgeting from the outset, alongside other sponsorship costs.
Section G: Need assistance?
DavidsonMorris are specialists in UK immigration, working closely with businesses to provide guidance and support with UK immigration compliance and Home Office applications such as sponsor licences and sponsored work visas. We can advise on whether you are liable to pay the Immigration Skills Charge, the amount you will need to pay and the process for settling your liability.
Taken together, all of the costs involved in sponsoring a migrant worker can be substantial, adding to the resources, skills and attention required to meet your ongoing compliance duties as a sponsor. Failure to meet these duties will put your sponsorship licence at risk of suspension or revocation – which will curtail sponsored workers’ visas and impact the organisation’s ability to sponsor migrant workers.
Contact us if you have a question about the Immigration Skills Charge.
Section H: Immigration Skills Charge FAQs
What is the Immigration Skills Charge?
The Immigration Skills Charge (ISC) is a fee paid by the sponsoring employer when assigning a Certificate of Sponsorship for workers under the Skilled Worker visa route or the Global Business Mobility Senior or Specialist Worker route.
Why was the Immigration Skills Charge introduced?
The ISC was introduced to encourage employers to invest in training and upskilling the domestic workforce, reducing reliance on overseas workers.
How much is the Immigration Skills Charge?
Medium and large sponsors pay £1,000 for the first 12 months of sponsorship and £500 for each additional six-month block, while small or charitable sponsors pay a reduced rate of £364 for the first year and £182 for every further six months. The charge is paid up-front when the CoS is assigned and is refunded if the visa application is refused or the worker leaves the role sooner than scheduled. The surcharge is set to increase under government proposals.
Are there any exemptions to the Immigration Skills Charge?
Exemptions apply to certain workers, including those in PhD-level roles or those switching to a Skilled Worker visa from within the UK.
When is the charge paid?
The ISC is paid at the time of assigning a Certificate of Sponsorship for the sponsored worker.
What happens if the charge is not paid?
Failure to pay the ISC in full will result in the visa application being delayed or refused. Employers must ensure the charge is paid correctly to avoid disruptions.
Can the Immigration Skills Charge be refunded?
Refunds are available in specific circumstances, such as if the visa application is refused or if the worker does not take up their role.
Does the charge apply to part-time workers?
The ISC applies regardless of whether the sponsored worker is full-time or part-time, as long as they are being sponsored under an eligible visa route.
Is the charge payable for dependants of skilled workers?
The ISC only applies to the skilled worker being sponsored and not to their dependants.
Section I: Glossary
| Term | Definition |
|---|---|
| Immigration Skills Charge (ISC) | A fee paid by UK employers when sponsoring skilled workers from overseas under certain visa routes. |
| Skilled Worker Visa | A visa route that allows employers to recruit overseas workers for roles that meet specific skill and salary thresholds. |
| Certificate of Sponsorship (CoS) | A document issued by an employer to a skilled worker, enabling them to apply for a UK visa. |
| Charity | A non-profit organisation registered in the UK, also eligible for reduced ISC rates. |
| Occupation Code | A classification for jobs eligible for sponsorship under the Skilled Worker route, with some exempt from the ISC. |
| PhD-Level Roles | Jobs requiring doctoral-level qualifications, such as certain science and academic positions, exempt from the ISC. |
| Global Business Mobility: Senior or Specialist Worker | A visa route for transferring senior managers or specialists to the UK from linked businesses overseas. |
| Exemption | Scenarios in which the ISC is not payable, such as workers in specific roles or those switching visas within the UK. |
| Student Visa | A visa for overseas students, whose holders are exempt from the ISC when switching to a Skilled Worker visa. |
| ISC Refund | A repayment of the Immigration Skills Charge in specific cases, such as visa refusal or non-commencement of the job. |
| EU-UK Trade and Cooperation Agreement | An agreement that outlines rules for EU-UK relations, including exemptions for ISC under certain conditions. |
| Sponsorship Compliance | Legal obligations UK employers must meet when sponsoring skilled workers, including payment of the ISC. |
| Short-Term Assignments | Sponsorships where workers seek entry to the UK for less than six months, exempt from the ISC. |
| Home Office | The UK government department responsible for immigration, visas, and sponsorship regulations. |
Section J: Additional resources and links
| Resource | Description | Link |
|---|---|---|
| Immigration skills charge: GOV.UK overview | When the ISC applies, who must pay, and key exceptions | gov.uk/uk-visa-sponsorship-employers/immigration-skills-charge |
| Sponsor guidance: Skilled Worker (accessible) | Official rules for sponsoring under the Skilled Worker route | gov.uk/…/sponsor-a-skilled-worker-accessible |
| Sponsor guidance: Part 2 – sponsor a worker | General sponsor duties, fees and processes, including ISC references | gov.uk/…/sponsor-a-worker-general-information |
| Immigration Rules: Appendix Skilled Worker | Eligibility rules and conditions for Skilled Worker visas | gov.uk/…/appendix-skilled-worker |
| Immigration Rules: Appendix Global Business Mobility | Rules for Senior or Specialist Worker and other GBM sub-routes | gov.uk/…/appendix-global-business-mobility-routes |
| Appendix Skilled Occupations | Eligible SOC 2020 occupation codes, including research/HE roles | gov.uk/…/appendix-skilled-occupations |
| ISC Regulations 2017 | Legal basis for the charge and statutory exemptions | legislation.gov.uk/ukdsi/2017/9780111154663 |
| ISC process guidance (accessible) | Home Office internal processing guidance for ISC transactions | gov.uk/…/immigration-skills-charge-accessible-version |
| SMS guide: introduction | Using the Sponsorship Management System to assign CoS and manage duties | gov.uk/…/sms-guide-1-introduction-accessible |
| Senior or Specialist Worker visa | Route overview for GBM Senior or Specialist Worker applicants | gov.uk/senior-specialist-worker-visa |
