How Much Does it Cost to Sponsor Employees from Outside of the EEA?

By Amar Ali, Immigration Solicitor

November 27, 2020

With the end of the European Union free movement at the end of 2020, more and more businesses will need to look further afield to secure the personnel resources they need to run their operations. The current system used by the UK Home Office to control the inflow of skilled staff from outside of the European Economic Area (EEA) is centered around a model of sponsorship. The tier 2 system is used for skilled workers and tier 5 is for temporary workers. Businesses who wish to recruit non-EEA staff first need to apply for a sponsorship license, which if granted then allows them to issue Certificates of Sponsorship (COSs) to sponsored workers. It is clear that in the post-Brexit future, this work visa model will be widened in scope to include those from EU countries. Companies that envisage they will need to replace their existing supply of EU workers are heavily encouraged to apply for a sponsorship license as soon as possible, to ensure they are fully ready for the start of 2021. But exactly how much does it cost to sponsor someone for the UK to work visa and are there any other hidden fees which businesses need to be aware of?

How much does it cost to sponsor overseas staff?

It is essential that all businesses considering employing skilled workers from outside of the EEA understand the whole picture when it comes to costs. Unfortunately, the costs of employing staff from outside of the EEA do not end with the application fee for a sponsorship license; this is only the start. In addition to the application fee, other fees will need to be paid for:

The sponsor license application fee

The sponsor license application fee varies depending on the size of the businesses and the tier of license being applied for. These are as follows:

Tier 2 only: £536 for small businesses and charities and £1,476 for medium and large businesses
Tier 5 only: £536 for small businesses and charities and £536 for medium and large businesses
Tier 2 and 5: £536 for small businesses and charities and £1,476 for medium and large businesses
To add tier 2 to an existing tier 5 license: no fee for small businesses and charities and £ for medium and large businesses
To add tier 5 to an existing tier 2 license: no charge

Small businesses are classified as those with an annual turnover of £10.2 million or less and 50 employees or less.

Related Article: Read What Is The Total Cost For A Sponsor License Application here

Work visa application fee

Under tier 2 (general route), a work visa application fee must be paid for the individual workers and each dependent. The fee varies depending on whether the application is being made in-country, or outside, how long the visa is for, and whether the role is on the shortage occupation list. Fees currently range from £464 to £1,408 – see the Home Office website for a breakdown of the individual fees for your situation.

Each certificate of sponsorship (CoS)

For each Certificate of Sponsorship (CoS) issued by a sponsoring employer, the cost payable to the Home Office is currently £199.

The immigration skills charge

Under the existing system, sponsoring businesses are required to pay a fee for each member of staff they sponsor from outside of the EEA. This applies to tier 2 general and intra-company transfer visas granted for six months or more outside of the UK, or less than six months if the worker is applying from within the UK. If the individual is switching from a Tier 4 study visa to a tier 2 general work visa, or if they have a tier 2 (Intra-company Transfer) Graduate Trainee visa, or they will be undertaking a role which is has a PhD-level standard occupational classification (SOC) code, no immigration skills charge is payable.

The immigration skills charge is currently £364 for small businesses and charities, and £1,000 for medium and large businesses, for the first year. After the first year, the immigration skills charge is £182 and £500 respectively for each additional six months.

The Home Office website states that if the employee you are sponsoring will be in the UK for longer than six months, but less than one year, you must pay the immigration skills charge for at least 12 months.

The healthcare surcharge

The Immigration healthcare surcharge is paid by migrants as a contribution to enable them to access the UK-wide healthcare system (the NHS). This is payable for work visas of more than six months if applied for outside of the UK, or for any length of time if applied for within the UK. At present, the surcharge is £400 per year for the main applicant and a further £400 for each dependant person (e.g. spouse/children) who will be joining the individual in the UK.

Premium customer service for employers

Some employers may choose to pay a charge to take advantage of the Home Office’s premium customer service. This service provides additional benefits such as a dedicated account manager who can assist with any queries and five free five-day priority upgrade slots per year. The cost of this service is £25,000 per year for large businesses and £8,000 per year for SMEs.

Who pays for the various fees?

The employer will pay the sponsor license application fee, the fee to issue a CoS, the immigration skills charge, and the premium service fee (if they choose to take this optional service). Workers will typically pay the visa application fee and the immigration health surcharge, however, some employers may choose to pay for these to remove the financial burden on their new employee.

Final words

While hiring staff from overseas comes at a financial cost, the overall benefit of their skills and work must be taken into account. Over the next few years, the successor to this system (i.e. the new post-Brexit immigration system) will be essential in permitting and attracting the best workers in their field from around the world. By helping to offset or remove the burden of immigration fees, your business will be viewed as more attractive to prospective skilled workers who will, ultimately, work hard to help your enterprise grow and prosper in the future.

Looking for companies and job openings that sponsor migrants in the UK? Click here to use this tool.