When finance teams hear “sponsor licence application,” they often picture a single invoice for £536 or £1,579 and move on. In reality, the true bill is a layered stack of mandatory Home Office fees, statutory charges, optional accelerators and hidden compliance costs that can triple the headline figure. In 2025, the combination of higher fees, stricter cost recovery rules, and the move to eVisas has redrawn the budget map. Below is a clear, line by line breakdown of what you really pay and why each charge exists.
The Entry Ticket: Sponsor Licence Application Fee (one off)
Most licences granted or active on or after 6 April 2024 do not require renewal. They remain valid unless surrendered, suspended or revoked. Some specific routes can still have time limited rules.
- Worker licence (Small or Charitable): £536
- Worker licence (Large): £1,579 (as of 9 April 2025)
- Temporary Worker licence (all sizes): £574 (as of 9 April 2025)
Who counts as Small or Charitable (for accounting periods starting 6 April 2025): meet any two of three thresholds
- turnover ≤ £15 million
- balance sheet total ≤ £7.5 million
- ≤ 50 employees
If you do not meet the test you are in the Large band.
Priority Service (optional)
- £500 for a 10 working day consideration target (quota limited and not guaranteed).
Use only if the hire is time critical and you can tolerate not getting a slot on the day.
Certificate of Sponsorship (CoS) — per hire
Assign a digital CoS for each sponsored worker.
- Worker routes (for example Skilled Worker, Senior or Specialist Worker): £525
- Temporary Worker routes: £55
If you assign the wrong occupation code or need a re issue, the original CoS fee is a sunk cost. Build a five percent buffer for re issues in your forecast.
Immigration Skills Charge (ISC) — paid up front for the visa length
Funds training for UK residents. Payable by the employer only.
- Small or Charitable sponsors: £364 per year
- Large sponsors: £1,000 per year
- Scheduled uplift: the Government has confirmed a 32 percent increase from 16 December 2025 (Large rate to £1,320 per year).
Practical tip: model two scenarios for starts around that date — before 16 Dec 2025 and on or after 16 Dec 2025.
Immigration Health Surcharge (IHS) — usually the worker’s cost, but often employer funded
- Adults (main applicant and adult dependants): £1,035 per year
- Children under 18: £776 per year
Market reality: many employers pay IHS to stay competitive. For a five year grant, one adult is £5,175 upfront. A partner and two children add £18,110 in IHS alone.
Skilled Worker visa application fee (Home Office)
Fees vary by visa length and where the application is made. Typical current bands:
- Up to three years: from about £769
- More than three years: higher bands apply. Check the current table for the exact amount based on role and where the application is made.
Many employers also reimburse this to remove friction for new hires.
Professional fees, translations and disbursements
- Legal representation (illustrative): Small companies £2,000 to £3,500. Larger organisations £4,000 to £6,000
- Translations, couriers, notarisation: £300 to £600 plus
Cost recovery rules (2025): do not recover from workers the sponsor licence fee, CoS fee, ISC, or priority or premium processing fees. Recovery of other costs (for example visa or IHS) is tightly limited and must respect wage laws and genuine choice. Seek legal advice before using repayment clauses.
Compliance infrastructure — the hidden layer that prevents very costly failures
- Mock audits, HR policy reviews, quarterly SMS checks: £1,200 to £2,000 per year
- Cloud HR and SMS or API integration: £800 to £1,200 per year
- Onboarding update: BRPs are phased out. Workers evidence status via eVisa (View and Prove). Update right to work and onboarding playbooks accordingly.
Insurance and practical overheads
- Employer’s liability insurance: typically £120 to £300 per year. Policy must be £5 million minimum and valid at inspection
- Inspection ready premises: virtual or serviced office support £200 to £600 per year
Real world cost scenarios (2025 pricing)
Figures are illustrative and exclude optional legal or operations spending unless stated.
A) Single Skilled Worker hire — three year grant — employer pays visa and IHS
Start before 16 Dec 2025 (current ISC rates)
Small sponsor
- Licence £536
- CoS £525
- ISC £364 × 3 = £1,092
- IHS £1,035 × 3 = £3,105
- Visa fee about £769
Approximate upfront total: £6,027 (excluding legal or operations)
Large sponsor
- Licence £1,579
- CoS £525
- ISC £1,000 × 3 = £3,000
- IHS £3,105
- Visa fee about £769
Approximate upfront total: £8,978 (excluding legal or operations)
If the same hire starts on or after 16 Dec 2025 (ISC uplift applies) add about £960 to the Large sponsor case. That is £1,320 minus £1,000 = £320 extra per year for three years.
B) Worker with family (partner and two children) — five year grant — Small sponsor, employer pays everyone’s IHS and all visas
- IHS: two adults £1,035 × 5 = £10,350; two children £776 × 5 = £7,760; total £18,110
- Visa application fees: four application fees. Use the live table for the exact amount by band and location. Indicatively £3,500 to £6,000 plus
- Employer fees: Licence £536; CoS £525; ISC £364 × 5 = £1,820
Indicative subtotal (excluding advice and operations): about £23,991 to £26,991 plus.
Add compliance or operations (about £2,000 to £3,200 per year if you annualise) as appropriate.
Cash flow tips for SMEs
- Spreadsheet model: list every fee, the month it is due, and the bank balance impact
- Escrow mindset: ring fence 110 percent of worst case costs so a missed quota or CoS error never stalls onboarding
- Insurance top up: some brokers offer sponsor fee protection add ons at about £150 per year. Validate terms before relying on them
Forecasting beyond 2025
- ISC rise on 16 Dec 2025: model both pre rise and post rise starts in FY25 and FY26 hiring plans
- Inflation indexing: assume about five percent annual uplift in multi year models for government set fees unless or until guidance changes
Hidden savings that are often missed
- Reclassification: if you newly meet Small criteria mid year, request re banding to save on future licence type decisions and ISC for new CoS assignments
- Charitable relief: genuine charities use the Small licence fee even with higher turnover
- Role design: map roles to the correct occupation code at the outset to avoid costly CoS re issues and salary threshold surprises
Compliance and cost recovery policy (important in 2025)
- Do not seek repayment from workers for the licence fee, CoS fee, ISC, or priority or premium fees
- If considering recovery of visa or IHS, build clear, lawful policies and use them sparingly. Ensure there is no breach of National Minimum Wage or unfair deductions rules and that the worker had a genuine choice
Get legal guidance (fixed fee options)
A sponsor licence is a strategic ten year asset, but the true price is front loaded and multi layered. Know every line item — from the £536 licence to the £525 CoS to the £1,000 or £364 ISC (rising to £1,320 for Large sponsors on 16 Dec 2025) — and you can price hires accurately, negotiate budgets confidently and stay on the right side of 2025 recovery rules.
A Y & J Solicitors offers fixed fee bundles covering the full sponsor licence applicatiohttps://ayjsolicitors.info/uk-sponsor-licence-guide-for-employers/n, ongoing compliance, and five year cash flow forecasting for your hiring plan.
- Call: +44 20 7404 7933
- Email: contact@ayjsolicitors.com
Disclaimer: This guide is accurate as of 17 Oct 2025. Always check the latest Home Office fees and guidance before committing to budgets.