Sponsor pay compliance – further changes to sponsor guidance dated 8 April 2026

We recently wrote about the changes that had been made to immigration rules on the 5th of March 2026, as well as new requirements for Licensed Sponsors, following updates made to sponsor guidance on the 6th of March 2026.

These changes together have imposed stricter compliance expectations on sponsors, created a tighter focus on sponsor responsibilities beyond immigration rules; and stressed that sponsorship is a voluntary scheme under which the Home Office has the discretionary ability to revoke licences where sponsors do not meet compliance requirements. This follows an emerging theme of increased scrutiny by the Home Office around sponsor compliance.

On the 8th of April 2026 the Home Office made further changes to the Skilled Worker Guidance which introduce a new salary reporting requirement. In this article Alex Christen and Jake Hayward explore the latest requirements for sponsors, explain what they mean in practice, and share insights into what can be done to safeguard against non-compliance.

Understanding the changes made on March 6th

Sponsors have long acted as an extension of the Home Office itself, being able to regulate the application of sponsor processes. However, the updated guidance in March this year added a new paragraph to the ‘Guiding principles’ section, which states:

“Participation in the sponsorship scheme is voluntary and sponsors seek membership for their own benefit. Membership is subject to the strict terms contained within this guidance. Sponsors should be aware that a licence is held at the broad discretion of the Home Office and can be terminated at any time. A licence creates no property or other enforceable right.”

This update confirms the Home Office’s status as a regulatory body that sets “rules” in this area. Sponsors must either comply or risk compliance action.

For the purposes of this article, the relevant changes made to the guidance in March regarding “pay” were as follows:

• The threshold required for the revocation of a sponsor licence, where a sponsored worker’s salary has been artificially inflated to qualify for settlement in the UK, was lowered. Whereas previous guidance noted that the Home Office needed to be ‘satisfied’ that this had occurred, in order to revoke a licence; the guidance from March states that the Home Office need only have ‘reasonable grounds to suspect’ this.
• Previous guidance contained a mandatory ground for refusal or revocation, where salary had been inflated for settlement applications. However, the guidance introduced in March 2026 expanded the scope to include salary inflations for entry clearance, permission, or settlement – this includes initial Skilled Worker visa applications and extensions. Since minimum salary levels were increased for Certificates of Sponsorship (CoS) assigned on or after the 22nd of July 2025, many roles are no longer eligible for sponsorship. Where a sponsor is supporting an application to extend an existing sponsored employee’s permission for example, and the current salary does not quite meet the new requirements, the new guidance makes it clear that increasing the salary to meet the minimum required level will be a ground on which the Home Office will revoke the sponsor licence.
• A new provision has clarified that grounds for licence revocation ‘do not necessarily require breaches to be deliberate or made knowingly’. Subsequently, accidental breaches can still result in the loss of a licence.

These changes are relevant when considering the requirements set out in the latest guidance, dated 8th of April 2026.

How the latest guidance addresses Salary Compliance

The guidance has long stated that sponsors must ensure they understand the rules on calculation of salary when preparing a CoS. Paragraph SK7.1. of the Skilled Worker guidance now states sponsors must be compliant with:

• Allowances, i.e. what is allowed, and what is not allowed, to be considered within salary calculations,
• Pro-rated salaries, and
• How the Home Office assesses compliance with salary requirements (the new requirement)

Allowances – what can and cannot be included in the calculation?

As a recap, paragraph SK7.2. of the Skilled Worker guidance states that, in most cases, the Home Office will only allow guaranteed basic gross pay to be included in the salary calculations for Skilled Workers. Guaranteed basic gross pay:

• is pay before income tax,
• includes employee pension and national insurance contributions, and
• includes other guaranteed payments which are treated exactly the same as basic gross pay for tax, pension, and national insurance purposes.

In practice, this means the salary calculation used on the CoS should reflect the Skilled Worker’s contractual, fixed pay, expressed as a gross amount and processed through payroll in the same way as a salary. Where the guidance refers to guaranteed payments, this is limited to payments that are fixed and paid in the same way as the salary.

It does not permit payments that are variable or conditional, such as bonuses, shift pay, or commissions – even if they are paid regularly. An example of a guaranteed payment treated the same as gross pay could be London weighting, but only if it meets the criteria above.

The guidance provides a non-exhaustive list of allowances, pay or benefits (even if they are guaranteed) that cannot be included within the salary calculations, including:

• Additional pay such as shift allowance, overtime, or bonus pay, whether or not it is guaranteed,
• Any allowances, such as accommodation or cost of living allowances,
• One-off payments, such as ‘golden hellos’ or signing bonuses, and
• Any payments relating to immigration costs, such as the application fee or the Immigration Health Charge.

The full list is here, and we recommend seeking advice if you are not sure if a payment can be included.

Pro-rating salaries and irregular working patterns

Paragraph S4.16 of the Skilled Worker sponsor guidance provides that, when assigning a CoS, the gross salary figure may be expressed across a range of time periods, including hourly, daily, weekly, monthly, or annually. This is relevant where workers are engaged on irregular working patterns, as it requires sponsors to present pay in a way that reflects the workers’ actual working hours.

To supplement this, a recent update was made to paragraph SK7.17 to confirm the position where working hours may vary each week. This is mostly relevant in sectors such as healthcare, where shifts often rotate and workers are subject to on-call periods. The guidance considers this, with the following provisions:

• Work in excess of 48 hours in some weeks can be considered towards the general salary threshold, provided the average over a regular cycle (which can be no more than 17 weeks) is not more than 48 hours a week,
• Any unpaid rest weeks will count towards the average when considering whether the salary thresholds are met, and
• Any unpaid rest weeks will not count as absences from employment.

“For example, a worker who works a pattern of 60 hours a week for £20 per hour for two weeks, followed by an unpaid rest week, will be considered to work 40 hours a week on average and have a salary of £41,600 (£20 x 40 x 52) per year.”

How compliance of Salary Regulations is assessed by the Home Office

The latest version of the guidance reminds sponsors that the Home Office will regularly check that sponsored employees are being paid at least the salary their sponsor stated on their CoS, or in any Change of Circumstances Notification the sponsor subsequently makes.

The Home Office will do this through compliance checks, HMRC checks, or both methods. Though the Home Office has been validating information with HMRC in practice for some time, this is the first time it has been expressly stated within the guidance.

New stipulations have been added regarding pay periods and their reporting:

• Skilled Workers must be paid the required salary in pay periods of at least a monthly frequency, unless their contract specifies a different pay frequency,
• The salary paid to the worker in each pay period must equal or exceed the going rate for every hour worked in that pay period,
• If the worker’s pay frequency is monthly, or less frequent than monthly, the salary paid to the worker over any 3-month period must be at least equal to a quarter of the required annual salary. For example, if the worker’s annual salary is £52,000, their salary over any 3-month period must be at least £13,000,
• If the worker is paid more frequently than monthly, the salary paid to the worker in any 12-week period must be at least equal to 12/52 of the required annual salary. For example, if their annual salary is £52,000, their salary over any 12-week period must be at least £12,000, and
• If the worker is being sponsored to work a pattern where the regular hours are not the same each week, resulting in uneven pay, sponsors must confirm the working pattern when they assign the CoS (or in a change of circumstances notification if the irregular working pattern arises after the worker has been granted permission). In such instances the salary over any 17-week period must be at least equal to 17/52 of the required annual salary. For example, if the worker’s annual salary is £52,000, their salary over any 17-week period must be at least £17,000.

In practice, these consistent periodic measures of compliance will require sponsors to be consistently monitoring workers’ salaries as opposed to assuming a good end to the year may make up for underpayment within the months prior. Being noncompliant and paying a sponsored worker less than what the CoS states, and/or what the Home Office was told the worker will be paid, is a consequential ground for the sponsor licence to be revoked.

Importantly, sponsors should also note the requirement to report irregular working patterns if they had not previously been explained when assigning the CoS. We are aware that the Home Office is taking a strict approach to compliance with this requirement.

Sponsors should assess their sponsored workforce now and make sure they report any irregular working patterns as soon as possible.

If not done, and the Home Office identifies a working pattern that should have been reported, this is more likely to result in compliance action being taken against the sponsor.

What these changes mean for Sponsor Licence holders

With the March guidance update in mind, the Home Office’s status as a regulatory body affirmed, and the introduction of a provision whereby accidental breaches can result in the loss of a licence, it is more important than ever that sponsors are mindful of strict adherence to the updated sponsor guidance.

It is imperative that sponsors review their HR systems, especially payroll, to determine whether they are paying all workers as require – particularly those that may be working irregular hours, or who may have quieter periods throughout the year.

Sponsors must make sure they report any existing irregular working patterns in line with the new guidance.

We would also recommend sponsors to be aware of the current roll out of the Employment Rights Act 2025 (ERA). The guidance has expressly stated for some time that a sponsor licence may be revoked for noncompliance with wider UK Employment Law, and more recently the guidance added an extra layer to this by stating sponsors must actively make their employees aware of their employment rights.

This is even more important as the current roadmap for ERA implementation has new employee rights coming into effect throughout 2026, as well as later into 2027/28. As such, sponsors should keep on top of the constantly updating legal landscape.

Alex Christen

Partner

Business Immigration, Employment, Employment Investigations, Equality & Diversity, International

Alex is a Partner in our Employment and Immigration team. Alex leads the business immigration team, successfully supporting companies and individuals with immigration issues, including understandin... Read More

Jake Hayward

Trainee Solicitor

Employment

Jake Hayward is a Trainee Solicitor in our Employment and Immigration team. Jake studied both LLB Law and his LPC LLM at Swansea University.... Read More