The UK government has introduced a significant change to the Skilled Worker Visa program, effective from April 4th, 2024. To sponsor non-UK nationals, businesses must now meet a new salary requirement, with a minimum annual salary of £38,700. This change raises important questions for employers and foreign workers about National Insurance (NI) contributions, taxes, and how the new salary threshold impacts both the cost of hiring and the overall immigration process.
If you’re a business looking to hire non-UK nationals or a worker planning to apply for a Skilled Worker Visa, understanding the salary threshold and associated taxes is crucial. In this blog, we’ll break down everything you need to know about the new rules, including NI and tax obligations, so you can stay compliant and informed.
Detailed Overview of the New Skilled Worker Visa Salary Requirements
Under new rules, employers must need to offer the standard salary for the type of work the employee will do, whichever is higher
- £38,700 Per Year
- The ‘going rate’ for the type of work the employee will do
It should be noted that if the going rate is higher than £38,700 per year, for instance, the IT Manager’s going rate is £50,900 per year, an employer must pay the amount to avoid visa rejection.
Monthly NI and Tax Implications for the £38,700 Salary Threshold
Let’s have a look at the monthly National Insurance (NI) and Tax that will be incurred for a salary of £38,700 per year. Here are the calculations:
Pay frequency: Monthly, Yearly Wages: £38,700.00
| Period | Tax Code/Basis | NI Category | Gross Pay | PAYE Tax | Employee NI | Employer NI | Net Pay |
|---|---|---|---|---|---|---|---|
| 1. April | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 2. May | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 3. June | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 4. July | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 5. August | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 6. September | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 7. October | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 8. November | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 9. December | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 10. January | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 11. February | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| 12. March | 1257L | A | £3,225 | £435.20 | £174.16 | £421.35 | £2,614.64 |
| Total | - | - | £38,700 | £5,224.00 | £2,089.92 | £5,056.20 | £31,375.68 |
Recent Changes to National Insurance Rates
As of April 6, 2025, the Employer National Insurance (NI) rate has increased from 13.8% to 15% on wages over £416. Previously, the 13.8% rate applied to wages above £758.33. This change means that many employers are now facing higher Employer NI costs, despite the increase in the Employer Allowance from £5,000 to £10,500.
For the £38,700 salary requirement, the gross monthly salary will be £3,225. Monthly tax will amount to £435.20, and the Employee NI will be £174.16. In total, £609.36 will be deducted from employees’ pockets each month. Additionally, the business is required to pay Employer NI, which amounts to £421.35 per month for the 2025-26 tax year. This is £80.90 higher than the previous year.
Comparative Salary Thresholds for Health and Care Worker Visas
However, this salary requirement does not apply to the health and care worker visa. Care workers need to be paid at least £29,000 per year. Below is a table of their monthly NI and tax costs:
Pay frequency: Monthly, Yearly Wages: £29,700.00
| Period | Tax Code/Basis | NI Category | Gross Pay | PAYE Tax | Employee NI | Employer NI | Net Pay |
|---|---|---|---|---|---|---|---|
| 1. April | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 2. May | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 3. June | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 4. July | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 5. August | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 6. September | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 7. October | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 8. November | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 9. December | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 10. January | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 11. February | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| 12. March | 1257L | A | £3,225 | £273.60 | £109.49 | £300.00 | £1733.58 |
| Total | - | - | £38,700 | £3283.20 | £1313.88 | £3600.00 | £20802.96 |
Get Sponsor Licence
For Your Business
− No win no fee
− Guided by partnering lawyer
− 30-day free accounting service if needed
NI and Tax Implications for Care Workers
Under the new salary threshold, for the tax year 2024-25, care workers need to pay £273.6 of tax and £109.49 of NI each month, which is £383.09 in total. Again, the company that issued the work permit needs to pay another £228.9 of Employer NI on top of its total Employer NI crosses £5,000 in a year. This £5,000 allowance is only available for small businesses.
Need Assistance?
If you are planning to recruit a skilled worker and the salary requirement is different, we can help you calculate monthly NI and tax costs. Our experienced team is ready to support all your accounting needs, helping your business stay compliant and run smoothly. Call us on 07564 964141 to schedule your free consultation.
Frequently Asked Questions
What happens if my business doesn't meet the skilled worker visa salary limit?
If the CoS (Certificate of Sponsorship) does not meet the new salary requirement, the applicant’s visa application can be rejected or the matter can go to the caseworker.
How many hours can a Skilled Worker work in the UK?
Besides the sponsored job, skilled workers can work for an additional 20 hours a week in another job but work must be in an eligible occupation code.
What is the minimum salary for a new entrant skilled worker visa & COS?
The minimum salary for ‘new entrant’ skilled workers has to be not less than £30,960; and 70% of the prorated going rate for the occupation code, whichever is higher.
How many days can I stay outside the UK on a Skilled Worker visa?
You’re allowed a maximum of 180 days outside the UK within any 12 months. If any employee spends more time than this, it may impact their ILR (Indefinite leave to remain) application.
How much bank balance is required for a UK Skilled Worker visa?
To secure a UK Skilled Worker visa, you must show a bank balance of £1,270 for at least 28 days. Alternatively, if your employer provides financial support, they certify it on your application.
If my salary is £29,000 how much tax do I need to pay?
The monthly PAYE tax will be £273.60, and Employee NI will be £109.49 per month. Therefore, the total deductions from your salary will be £383.09 per month. The £29,000 minimum salary is applicable to care workers, senior care workers, and similar positions.
If my salary is £38,700, how much tax do I need to pay?
The monthly PAYE tax will be £435.20, and Employee NI will be £174.16 per month. Therefore, the total deductions from your salary will be £609.36 per month.
