Section A: MAC Report December 2025
The Migration Advisory Committee’s report on the fiscal impact of immigration is a technical assessment of how immigration interacts with the UK’s public finances, and it is written for policymakers who increasingly justify immigration rules through economic and fiscal outcomes. For employers who rely on the Skilled Worker route, focusing on what the MAC actually measured, and how it framed that analysis, is more important than the headline numbers themselves.
Central to the report is a distinction between two types of fiscal assessment. Static analysis looks at the impact of immigration at a single point in time, typically focusing on tax paid and public services used in a given year. Dynamic analysis, which is where the MAC places greater weight, looks at fiscal contribution over a person’s lifetime in the UK. That means estimating what a worker pays into the system through income tax, National Insurance and indirect taxes, and offsetting that against their use of public services across different stages of life.
1. Focus on Skilled Worker cohort
The MAC deliberately centred its first dynamic analysis on the Skilled Worker cohort that entered the UK in 2022/23. That choice was not accidental. These workers entered under the post-Brexit sponsorship system, following significant reforms to salary thresholds, skill levels and sponsorship controls. From a policy perspective, this cohort represents the system as it was redesigned to prioritise economic contribution.
For employers, that matters because the MAC is effectively assessing the outcomes of employer-led migration. Skilled Worker visas require a genuine job offer, sponsorship by a licensed employer and a salary that meets prescribed thresholds. In other words, the fiscal outcomes measured by the MAC are directly shaped by employer behaviour, including role design, pay levels and retention.
The report therefore treats Skilled Worker immigration as structurally different from routes that are not tied to employment. That framing reinforces a policy assumption that work-based migration should be judged by whether it delivers sustained participation in the labour market and tax base.
2. Fiscal contribution in the MAC model
The MAC model allocates public revenues and public spending to individuals using established economic assumptions. Revenue includes income tax, employee and employer National Insurance contributions, VAT and other indirect taxes. Public spending covers areas such as healthcare, education, welfare benefits and other age-related services.
Crucially, the MAC does not treat all spending equally across time. Younger working-age migrants are modelled as high contributors during their prime earning years, with greater public spending occurring later in life. That lifetime framing explains why age at arrival and length of stay feature so heavily in the conclusions.
For employers, the relevance is straightforward. The system rewards early and sustained labour market participation. Workers who arrive in their twenties or thirties, remain employed and progress in pay terms produce markedly different fiscal outcomes from those who arrive later, earn less or cycle in and out of work. That logic increasingly feeds into how policymakers evaluate visa routes and eligibility thresholds.
3. Main applicants vs dependants
One of the most important methodological choices in the report is the separation of main applicants and dependants. The MAC models them as distinct fiscal actors, rather than treating families as a single economic unit. Main applicants are assessed primarily through their employment and earnings. Dependants are assessed based on whether adult partners work and what level of earnings they achieve.
This distinction matters for employers because the positive fiscal outcomes identified in the report are driven almost entirely by main applicants. Dependants, taken as a group, have relatively small overall lifetime contributions which are negative in aggregate in the modelling. That does not reflect wrongdoing or failure by employers, but it does explain why dependant policy has become a recurring pressure point in recent rule changes.
From a policy perspective, the implication is that the state increasingly expects sponsored workers themselves to carry the fiscal case for their presence in the UK. Employers may not sponsor dependants, but dependant outcomes still influence how routes are judged and reformed.
4. Impact of MAC methodology
The widely cited present value net fiscal contribution figure of around £47 billion over the lifetime of the 2022/23 Skilled Worker cohort is a product of these modelling choices. It reflects a system where access to work, salary thresholds and employer sponsorship act as filters. For employers, the key takeaway is not the number itself but the logic behind it.
The MAC is demonstrating that fiscally positive outcomes are not accidental. They arise where immigration rules align with labour market demand, credible roles and sustained earnings. That alignment places employers at the centre of the policy narrative. Sponsorship decisions, pay structures and retention strategies now feed into how the system is defended and how it is tightened.
Employers who understand this methodology are better placed to anticipate where scrutiny will increase and where policy support is likely to remain. Those who rely on sponsorship without considering longer-term fiscal narratives risk being caught out when rules shift in response to the same analysis that currently supports the system.
Section B: Findings on Skilled Worker Route
The headline conclusion of the MAC’s analysis is that the Skilled Worker route delivers a substantial net fiscal benefit to the UK over time. For the 2022/23 cohort, the Committee estimates a present value net fiscal contribution of around £47 billion over their lifetime. That figure has been widely quoted, but for employers the more important point is why the route performs so strongly when measured in this way.
The Skilled Worker route is not fiscally positive by chance. Its design embeds a set of economic filters that shape who comes to the UK, how long they stay and how they participate in the labour market. The MAC’s findings reflect the cumulative effect of those filters rather than a single policy lever.
1. Employment as a condition of entry
Unlike many other immigration routes, Skilled Worker visas are conditional on employment from day one. A worker cannot enter the UK under this route without a confirmed role, an approved sponsor and a salary that meets or exceeds the relevant threshold. From a fiscal perspective, that immediately places Skilled Worker arrivals in a different category from routes where work is optional, delayed or uncertain.
The MAC highlights employment rates as one of the strongest drivers of positive fiscal outcomes. Skilled Worker main applicants have consistently high participation in the labour market, which translates into steady income tax and National Insurance contributions from an early stage. For employers, this reinforces a core policy assumption that work-based migration should deliver immediate and sustained economic activity, not speculative or deferred contribution.
2. The role of salary thresholds and earnings progression
Salary levels are central to the MAC’s conclusions. Higher earnings generate disproportionately higher fiscal returns, particularly when combined with long periods of employment. The report shows that fiscal gains are heavily concentrated among higher earners within the Skilled Worker cohort, with a significant share of the overall surplus generated by the top segment of earners.
For employers, this finding carries an implicit message. Meeting the minimum salary threshold is not where the fiscal story begins or ends. Roles that allow for progression, promotion and real wage growth are far more likely to align with the outcomes the system is designed to reward. Where sponsored roles stagnate at the lower edge of eligibility, the fiscal logic underpinning the route becomes weaker, even if the role remains technically compliant.
3. Age at arrival and length of stay
The MAC places significant weight on age at arrival when modelling lifetime contribution. Workers who arrive earlier in their careers are more likely to spend a longer period in employment in the UK, contribute more in tax and delay age-related public spending until much later. That pattern produces markedly stronger lifetime outcomes than arrivals later in life with shorter remaining working spans.
From an employer perspective, this explains why policymakers often favour routes that attract early- to mid-career professionals. It also highlights the importance of retention. The fiscal case assumes that Skilled Worker migrants remain economically active in the UK for a meaningful period. High turnover, short sponsorship cycles or repeated exits undermine that assumption and weaken the overall case for the route.
4. Why main applicants drive the surplus
One of the clearest findings in the MAC report is that the positive fiscal contribution of the Skilled Worker route is generated almost entirely by main applicants. Their employment, earnings and tax payments account for the net surplus identified in the modelling. Dependants, when assessed separately, have relatively small overall lifetime contributions which are negative in aggregate.
For employers, this distinction reinforces the policy reality that the Skilled Worker route is justified first and foremost on the economic activity of the sponsored worker. While family members play an important role in attraction and retention, the fiscal case for the route rests on the main applicant’s continued participation in the labour market at a sufficient level.
5. Why this matters beyond the headline number
The MAC’s endorsement of the Skilled Worker route as fiscally positive provides political cover for a system that has faced sustained scrutiny. However, it also sets expectations. A route that is defended on the basis of earnings and tax contribution will continue to be shaped around those metrics.
For employers, the message is double-edged. Sponsorship through the Skilled Worker route aligns with government fiscal objectives when roles are credible, salaries are robust and workers remain employed over time. Where those conditions are not met, the same fiscal logic can be used to justify tighter thresholds, increased scrutiny or route-specific reform. Understanding why the route performs well is therefore as important as knowing that it does.
Section C: The Fine Print for Employers
While the MAC’s findings are often summarised as a clear endorsement of the Skilled Worker route, the detail beneath the headline figures tells a more qualified story. The report is careful to show that fiscal outcomes are uneven, sensitive to assumptions and highly concentrated within certain parts of the sponsored workforce. For employers, these nuances matter because they point directly to where policy pressure and compliance risk tend to emerge.
The Skilled Worker route performs well overall, but it does not do so evenly. The fiscal case depends on who is sponsored, how they are paid and whether they remain economically active in the UK over time.
1. Fiscal gains are concentrated among higher earners
One of the most striking findings in the MAC’s analysis is the degree of concentration in fiscal outcomes. A large proportion of the overall fiscal surplus generated by the Skilled Worker cohort is attributable to a relatively small group of higher earners. The report indicates that the top segment of earners accounts for the majority of the net fiscal gain.
For employers, this underlines a structural reality of the system. While minimum salary thresholds determine eligibility, they do not define where fiscal value is generated. Roles that sit only marginally above the threshold contribute far less to the overall fiscal picture than roles with stronger pay levels and clearer progression.
This concentration also explains why salary policy has been such a persistent focus of reform. Where fiscal value is seen to depend on higher earnings, pressure builds to raise thresholds or tighten access at the lower end of the market. Employers operating close to the minimum therefore face greater exposure to future rule changes, even if they remain compliant today.
2. Dependants weaken the aggregate fiscal picture
The MAC’s treatment of dependants is one of the most politically sensitive aspects of the report. Dependants are modelled separately from main applicants, and their fiscal outcomes are driven largely by whether adult partners work and at what level. In aggregate, dependants have relatively small overall lifetime contributions which are negative in the modelling.
For employers, this finding helps explain recent and ongoing policy debate around dependant access. Although employers do not sponsor dependants directly, dependant outcomes influence how routes are assessed and defended at a policy level. Where dependant participation in the labour market is low, the fiscal case for allowing family members weakens, regardless of the benefits to recruitment and retention.
This dynamic places employers in a difficult position. Family-friendly policies support attraction and stability, but fiscal modelling does not capture those commercial benefits. The MAC report therefore provides context for why dependant rules can change abruptly and with limited regard for employer workforce realities.
3. Health and Care sub-route distinctions
The report draws a clear distinction between the general Skilled Worker route and the Health and Care sub-route. While Health and Care main applicants make a positive lifetime fiscal contribution overall, outcomes are materially weaker than those of higher-paid Skilled Worker roles, and care workers are estimated to be fiscally negative over their lifetimes. The overall net fiscal contribution of Health and Care visas is only just positive in the model, because the positive contribution from main applicants is offset by negative contributions from dependants.
For employers in these sectors, the MAC’s analysis highlights a persistent vulnerability. Even where roles are socially valuable and politically supported, fiscal metrics can still place them under pressure. The report does not argue against health and care migration, but it does show why these roles are more exposed when fiscal contribution becomes a dominant policy lens.
That exposure helps explain why health and care sponsorship is often subject to targeted adjustments rather than wholesale protection.
4. Retention and churn undermine the fiscal case
The MAC’s lifetime modelling assumes a degree of stability in employment and residence. Workers who leave the UK early, switch in and out of employment or fail to progress in pay terms generate weaker fiscal outcomes than those who remain continuously employed. High levels of churn therefore dilute the very outcomes that justify the route.
For employers, this has direct operational implications. Sponsorship is not fiscally neutral if it is treated as a short-term fix. Where businesses rely on repeated recruitment without retention, the fiscal logic underpinning the route erodes. That, in turn, increases the likelihood of tighter rules designed to filter out perceived low-value use of the system.
5. Why nuance matters more than reassurance
The MAC report provides reassurance that the Skilled Worker route works in fiscal terms, but it does so conditionally. The system performs well where sponsored roles are well paid, sustained and embedded in long-term workforce planning. It performs less well where sponsorship is marginal, short-lived or heavily reliant on lower-paid roles.
For employers, the danger lies in reading the report as blanket approval. The same analysis that supports the route also supplies the evidence base for selective tightening. Understanding where the fiscal case is weakest is therefore as important as knowing where it is strongest, particularly for businesses that rely on sponsorship as a core part of their workforce model.
Section D: MAC Report & Future Direction of UK Work Immigration
The MAC’s fiscal analysis is not a backward-looking exercise. Although it focuses on a defined cohort, the way the findings are framed provides a clear indication of how future work migration policy is likely to evolve. For employers, the report reads less like a neutral assessment and more like a reference document that policymakers can draw on when justifying reform.
Fiscal contribution has become one of the central lenses through which the government assesses the legitimacy of work routes. The Skilled Worker route performs well under that lens, but the criteria that drive those results also point to where the system will be tightened rather than expanded.
1. Fiscal performance as a proxy for policy protection
Routes that can be demonstrated to generate strong fiscal returns are more defensible politically. The MAC’s analysis gives the Skilled Worker route a degree of insulation by showing that it delivers sustained tax revenue when properly targeted. However, that protection is conditional rather than absolute.
For employers, the implication is that future reforms are unlikely to abandon work sponsorship altogether. Instead, changes are more likely to refine who qualifies, at what salary level and under what conditions. Fiscal modelling provides the rationale for selective tightening rather than wholesale closure.
This explains why recent changes have focused on thresholds, eligibility criteria and sub-route distinctions rather than on dismantling the sponsorship system itself.
2. Continued pressure on salary thresholds and role credibility
The concentration of fiscal gains among higher earners feeds directly into policy debates about salary thresholds. Where evidence suggests that fiscal value increases sharply with earnings, pressure builds to recalibrate minimum pay requirements upward or to narrow access to roles perceived as marginal.
For employers, this points to a structural risk. Roles that only just meet current thresholds may remain lawful in the short term but become increasingly exposed as fiscal arguments are used to justify future increases. The MAC report does not recommend specific threshold changes, but it strengthens the analytical case for linking eligibility more closely to earnings outcomes.
Employers who plan sponsorship on the basis of current minimums without modelling future pay progression leave themselves vulnerable to abrupt policy shifts.
3. Greater scrutiny of lower-paid and sector-specific routes
The differentiated outcomes between general Skilled Worker roles and the Health and Care sub-route underline a broader trend. Where roles are lower paid or operate under sector-specific concessions, fiscal outcomes are weaker even if the roles are socially valuable.
For employers in these sectors, the signal is not that sponsorship will disappear, but that it will remain under closer review. Sector-specific routes are more likely to see targeted adjustments, additional conditions or tighter controls as fiscal narratives evolve.
This reinforces the need for employers to treat sponsorship as a regulated activity subject to shifting policy priorities rather than a static entitlement.
4. Retention, settlement and long-term contribution
The MAC’s dynamic modelling places implicit value on long-term residence and sustained employment. Workers who remain in the UK, progress in pay terms and move towards settlement generate stronger lifetime fiscal outcomes than those who leave after a short period.
For employers, this has two important implications. First, retention is no longer just a commercial concern but part of the policy logic that underpins the route. Second, settlement pathways are likely to remain closely linked to earnings and continuous employment.
Businesses that fail to plan for extensions and settlement risk creating churn that undermines both workforce stability and the fiscal assumptions that support sponsorship routes.
5. Why employers need to read the policy direction, not just the data
The MAC report is often cited as proof that the Skilled Worker route works. For employers, the more valuable insight lies in how and why it works. Fiscal contribution has become a benchmark against which routes are measured, refined and defended.
Employers who understand that direction are better placed to anticipate change rather than react to it. Those who treat the current rules as fixed risk being caught out when the same fiscal logic that supports the system is used to reshape it.
Section E: DMS Perspective
The MAC report is frequently cited as confirmation that the Skilled Worker route is working as intended. From a DavidsonMorris perspective, that reading is only partly right. The report does validate the economic logic of sponsorship, but it also exposes where employers quietly create risk for themselves by treating immigration as a transactional process rather than a strategic one.
The most common mistake is to assume that fiscal positivity equates to regulatory safety. It does not. The MAC’s analysis explains why the route exists and why it is defended, but it also explains why compliance expectations, salary thresholds and evidential scrutiny continue to rise. Employers who rely on sponsorship without adjusting how they design roles and manage sponsored workers often find themselves misaligned with the very logic that supports the system.
1. Passing the threshold is not the same as satisfying the policy logic
Many employers approach sponsorship as an exercise in meeting minimum requirements. A role meets the salary threshold, the SOC code appears to fit and the visa is granted. The MAC report makes clear why that approach is increasingly fragile.
Fiscal value is not generated at the margin. It is generated where workers remain employed, progress in pay terms and continue to contribute at a level that materially exceeds the cost of public services over time. Roles designed to sit narrowly within eligibility criteria may pass initial scrutiny but are far more exposed when rules change or when extensions and settlement come into view.
From our experience, this is where employers encounter unexpected refusals, compliance action or workforce disruption, often several years into the sponsorship relationship.
2. Retention failures create immigration risk, not just recruitment cost
High turnover among sponsored workers is usually treated as a commercial issue. The MAC’s modelling shows why it is also an immigration risk. The fiscal case for sponsorship assumes continuity. Where workers leave early, cycle between employers or exit the UK altogether, the underlying assumptions that support the route weaken.
In practice, this plays out through increased scrutiny of sponsors with patterns of short-term sponsorship, repeated churn or inconsistent use of Certificates of Sponsorship. Employers are often surprised by this attention because each individual application appears compliant. Taken together, the pattern tells a different story.
3. Dependants are a blind spot in employer planning
Although employers do not sponsor dependants, dependant outcomes increasingly influence policy decisions. The MAC report highlights relatively small overall lifetime contributions from dependants which are negative in aggregate in the modelling, particularly where adult partners do not work. That analysis has already fed into rule changes affecting dependant eligibility on certain routes.
Employers often underestimate how dependant restrictions affect attraction, retention and resignation risk. When dependant rules tighten, sponsored workers reassess whether the UK remains viable for their family, regardless of how strong the role itself may be. Employers who ignore this dynamic tend to lose workers at critical points in the sponsorship lifecycle.
4. Compliance failures negate fiscal arguments entirely
The MAC report assumes lawful, compliant sponsorship. In reality, compliance failures remain one of the most common reasons employers lose the ability to sponsor. Record-keeping gaps, reporting failures and poorly documented roles undermine credibility regardless of how valuable the worker may be in fiscal terms.
From a Home Office perspective, fiscal contribution does not excuse non-compliance. Employers who assume that the economic value of their sponsored workforce provides protection are often the most exposed when audits occur.
5. Immigration strategy now sits alongside workforce and pay strategy
The clearest lesson from the MAC report is that immigration can no longer be treated as an administrative function. Sponsorship outcomes are shaped by pay structures, promotion pathways, retention planning and long-term workforce needs.
Employers who integrate immigration advice into broader workforce strategy are better placed to absorb rule changes without disruption. Those who do not tend to react late, at higher cost and with fewer options.
Section F: Need Assistance?
The MAC’s findings confirm that the Skilled Worker route remains a powerful tool for UK employers, when planned and managed well.
DavidsonMorris advises employers on sponsorship not just at the point of application, but across the full lifecycle of the employment relationship, including role design, salary planning, extension strategy and audit readiness.
If your organisation relies on sponsored workers, now is the right time to review whether your current approach aligns with the policy direction set out in the MAC report. Early advice can reduce disruption, protect your sponsor licence and provide clarity on how to structure your workforce in a system that is becoming more fiscally driven with each reform.
Contact us for specialist guidance for your organisation.
