The Immigration Skills Charge Explained: What Employers Actually Pay
The Immigration Skills Charge (ISC) is one of the largest and most frequently underestimated costs of sponsoring migrant workers and one of the easiest to get wrong. This guide explains who has to pay it, how much it costs in 2026, which roles are exempt, and the mistakes that cause employers to over or underpay.
What Is the Immigration Skills Charge?
The ISC is a mandatory fee paid by UK sponsors when they assign a Certificate of Sponsorship (CoS) to a worker on the Skilled Worker route. It is charged in addition to the the CoS itself (currently £525) and due at the time of CoS assignment.
It does not apply to dependant applications, the charge is only ever calculated against the worker (main applicant).
Who Has to Pay It?
The ISC must be paid by the sponsor, not the worker, and it must never be passed on to or recouped from the sponsored employee.
⚠️ Doing so is a breach of sponsor duties and can put your licence at risk.
2026 Rates
These are the current figures that apply:
Medium or large sponsors:
£1,320 for the first 12 months of sponsorship
£660 for each additional 6-month period
Small or charitable sponsors:
£480 for the first 12 months of sponsorship
£240 for each additional 6-month period
The charge is calculated automatically based on the visa length entered when the CoS is assigned, and it's paid upfront, in full, for the entire sponsorship period, not billed annually. For example, a medium/large employer sponsoring a 5 year visa would pay £6,600 (£1,320 × 5).
⚠️ If the worker will be in the UK for longer than 6 months but less than a year, you must pay for at least 12 months.
Are You a Small or Large Sponsor?
Your ISC rate depends on your organisation's size. You're classed as a small sponsor if you meet at least two of the following:
Annual turnover of £10.2 million or less
Balance sheet total of £5.1 million or less
50 employees or fewer
Exemptions: When You Don't Have to Pay
The ISC doesn't apply in every case. Common exemptions include:
Student switchers: workers switching into the Skilled Worker route from a Student visa held in the UK
Short entry clearance applications: permission granted for less than 6 months from outside the UK
CoS for the following occupations:
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)
Refunds
If a sponsored worker's visa application is refused, withdrawn, or if the CoS is not used, the ISC is generally refunded. Partial refunds can also apply if the worker's permission ends up being granted for a shorter period than originally sponsored, or if their employment ends earlier than planned in specific circumstances.
Refunds are not automatic in every scenario, so it is worth tracking ISC payments against actual outcomes rather than assuming any discrepancy will self-correct.
Common Mistakes Employers Make
Assuming company size classification without checking Companies House data: may lead to paying the wrong rate and potential delays
Forgetting the ISC is due in full upfront: budgeting it as an annual cost rather than a lump sum due at CoS assignment
Missing exemptions: assuming a whole department or job type is exempt when only specific occupation codes qualify
Not factoring the ISC into total hiring cost comparisons: for a medium/large sponsor hiring several migrant workers over multi-year visas can materially change the cost-benefit of overseas recruitment
Passing the cost to the worker, directly or indirectly: this breaches sponsor duties and may trigger compliance action against your licence
Why This Belongs in Workforce Planning and Not Just Payroll
For employers sponsoring workers at scale, the ISC is rarely a rounding error. Twenty medium/large-sponsor hires on 5-year visas works out to roughly £132,000 in ISC alone, before sponsor licence fees, CoS costs, or legal support. That's a figure worth surfacing in workforce planning and budget discussions early, rather than discovering it mid-recruitment when a CoS is about to be assigned.
Frequently Asked Questions
Can we pass the ISC cost on to the sponsored worker? No. The ISC must be paid by the sponsor and cannot be recovered from the employee, whether directly or through reduced salary, deductions, or informal arrangements. Doing so is a serious compliance breach.
Do we pay the ISC for a worker's dependants? No. The charge only applies to the main applicant's (the worker) CoS, not to partner or child dependant applications.
What happens if we assign a CoS at the wrong sponsor size rate? This can delay the worker's visa application and create compliance issues. If you're unsure whether you qualify as a small or medium/large sponsor, it is worth confirming your classification before assigning any Certificates of Sponsorship.
Does the ISC apply to Global Talent or Innovator Founder visas? No. The ISC only applies to the Skilled Worker route and some Global Business Mobility (Senior or Specialist Worker) routes. Unsponsored routes like Global Talent and Innovator Founder do not attract the charge.
If you are planning overseas hiring and want an accurate picture of total sponsorship costs, including ISC, licence fees, and CoS charges, get in touch with Outpost Immigration. We help employers budget and stay compliant before each CoS is assigned.