Understanding Skilled Worker salary discounts: New entrant 

In a previous piece we discussed the 4 April 2024 changes to the skilled worker route. In it, we briefly discussed the skilled worker discount for new entrants. In this article, we will delve deeper into this discount, who it can apply to and how you as an employer can take advantage of the discount. 

In our work with business immigration routes, this is the most commonly used and queried discount available to employers sponsoring international workers. The discount appears under options E and J of appendix skilled worker, with option E for new workers, and option J for existing skilled workers.

Understandably, option J will only be useful in very limited circumstances as it applies a discount to existing skilled workers who are considered new entrants, which is very rarely going to happen. This article will consider option E only and what the benefits and downfalls are to this option.

To see if you can take advantage of the discount, we must first make clear who counts as a New entrants. This category includes the following individuals:

The most common of these new entrants are under 26 year olds, students and graduates. Whilst under 26 year olds is self-explanatory, we will explore the student and graduate new entrant discounts specifically below.

Students and graduates, or those who most recently held permission under these routes and if they expired less than two years ago, can be offered a discounted minimum starting salary of £30,960 instead of the usual £38,700. The going rates are then also reduced to between £30,960 and £58,870, depending on the job they are being sponsored for. The relevant hourly rate is still a minimum of £15.88. If you need a brief overview of these different salary requirements, have a look at our ‘Changes to the Skilled Worker route’ guide.

This is great news for you as an employer who would only need to offer 70% of the newly raised salary requirements to recent or current students and graduates. However, there is an important caveat in that an employer can only sponsor the worker under the new entrant route (and therefore at the discounted salary) for up to four cumulative years, including their time as a graduate. As graduate visas usually last two years (or three for doctoral graduates), this results in initial sponsorship only being issued for two years.

As an employer, you would then need to apply and assign a new certificate of sponsorship to the worker at the higher starting salary/going rate (which can mean required salary rises of £25,230 in the most extreme case of SOC 1111) if you wish to keep them on for more than the two years.

As most students are now taking advantage of the graduate route after their studies, employers are more likely to have this two year restriction and the need to sponsor in two separate parts: two years at a lower salary and three years at the usual salary threshold rate, which may have increased by the time you need to extend the application.

The new entrant route definitely helps employers retain workers who are coming to the end of their graduate route, but could be said to only put off the inevitable high salary that will need to be offered which is the median salary according to ASHE (Annual Survey of Hours and Earnings) for the occupation, or £38,700.

Alternatively, it can be seen as a reasonable increase when the worker will no longer be learning on the job, having reached the required knowledge level after two years and would be entitled to the higher salary that the employer has to offer.

However, with the upcoming general election, changes to rules may happen, so make sure to watch this space for updates.