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April 2025: New UK Skilled Worker Visa Salary Threshold And It’s Impact

Written By:

Gino Peters

Reviewed By: Belinda E.

May 17, 2026 2:17 am

Category Tag: News

The rise of remote work made international expansion much easier in recent years, but hiring abroad still comes with legal and administrative complexity, as every country has its own labour laws and payroll rules that must be followed. In addition, not many companies can open a new entity in every new market that they are expanding into. That is when the Employer of Record (EOR) solution comes in handy. 

The EOR serves as the legal employer on paper, while the client company manages important activities related to the employees responsibilities and performance. 

In this guide we will cover what an employer of record is, how it works in detail, how much it can cost and which business should consider an EOR solution. 

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third party service provider that legally employs a person on behalf of another company in the country where the employee officially resides. As an official employer the responsibilities of EOR include issuance of an employment contract, processing payroll and withholding taxes and necessary social security contributions, as well as preparation of offboarding documents or any documentation that need to be signed by the employer. In addition, EOR ensures the compliance with local labour laws and serves as a first point of contact for any legal disputes. 

The client company that hired the employee through an EOR also has a list of responsibilities. As an Employer of Record does not have the visibility on operational activities behind the scenes a client company needs to provide direction and ensure proper team integration. 

In simple terms, the EOR provider acts as a legal employer in the country of the employee’s residence, while the client company takes on day-to-day manager work. 

Responsibility

Employer of Record (EOR)

Client Company

Employment contracts & any other official documentation

  •  
 

Payroll processing

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Income tax & social security contributions

  •  
 

Compliance with local labour laws

  •  
 

Statutory benefits administration

  •  
 

Managing daily work and projects

 
  •  

Setting goals and performance expectations

 
  •  

Providing equipment and tools

 
  •  

Leading the employee’s team and workflow

 
  •  

Employer of Record solutions gain more and more popularity in the field of global expansion as they allow businesses to hire best candidates fast and easy while staying compliant with local employment regulations. More information about EOR service are available if you would like to understand more.

EOR Meaning

The term “EOR” is the abbreviation for Employer of Record

Employer in this instance stands for the company that hires the employee and takes on duties related to it, such as onboarding and offboarding process, payment of wages and compliance with other legal requirements. 

“Record” from the EOR perspective refers to official registration with government authorities. The name of the EOR provider is stated in all payslips and tax filings, and should also be listed by the employee in any documents where employer must be stated, such as mortgage or loan applications. 

One might ask a question of why this legal structure exists. As it is not possible to provide an employment contract directly to a person that legally resides in another country, the business expanding abroad typically needs to establish a local entity. That involves legal registration, arrangement of local bank accounts and organisation of payroll structure, as well as compliance with local law. 

EOR allows to simplify the global hiring and reduce administrative burden through their existing legal entity. 

There are some other hiring models that can be confused with EOR. 

  • EOR and PEO 

Many sources online refer to EOR as “international PEO”, which may create confusion as these models have 1 important difference. 

A Professional Employer Organisation (PEO) serves as a co-employer of a client company. In other words, a business must already have an established entity in the country. The hiring tasks are, therefore, shared between 2 companies, while legal liability stays only with the client company. In the EOR model all legal risks are being taken by the official employer. Read more about the difference between PEO and EOR here. 

  • EOR and staffing agency 

Staffing companies mainly provide assistance for short-term projects by providing temporary workers. If the client wishes to employ a person for a longer time, EOR approach must be chosen. 

  • EOR and contractor model

Contractor agreements assume the involvement of independent workers rather than employees. This model is also often used for temporary, project-based assignments. It is important to remember that there is a big misclassification risk between a contractor and an employee in the company which can lead to potential legal issues. An EOR ensures that employment is legally compliant with local labour law. 

How does an Employer of Record work?

While it may sound complicated at first, a process behind the employer of record model is relatively straightforward. 

  1. The operating company selects a candidate 

The client company recruits the employee they want to hire in another country 

  1. The EOR becomes the legal employer & local employment contract is issued

The Employer of Record uses its local legal entity to prepare and issue an employment contract that complies with labour law of the country where the employee is based. Depending on case-by- case situation, the work visa might need to be secured beforehand. Our company provides immigration services, more details can be found here. 

  1. Payroll and taxes are managed 

The EOR takes on recurring responsibilities related to a payroll and ensures correct processing of income tax, social security contributions etc

  1. Benefits are administered

Paid leave, sick leave, pension contributions and any other statutory benefits are being managed by the EOR. 

  1. Ongoing compliance and HR support

It is the responsibility of the EOR to monitor changes in local labour law and ensure ongoing compliance. 

Example: 

Imagine a UK-based tech company found a perfect candidate in Germany for a position of a software developer. 

Instead of going through the administrative burden of opening a legal entity in Germany, the company chooses to work with an Employer of Record. The EOR hires the developer under a German employment contract and manages payroll and taxes. At the same time the UK company welcomes the new employee in the team and manages the daily work of a developer. 

What services does an Employer of Record provide?

The Employer of Record does more than just providing an employment contract to the employee. Typically a wide range of HR and compliance services is included in the EOR offer. For example, read about the services included in our EOR package here. 

  • Employment and HR administration 
  • Locally compliant employment contracts and support with other documents requested by authorities
  • Employee onboarding 
  • Employee record management. For example, control over PTO 
  • Payroll and tax management 
  • Regular payroll processing 
  • Tax withholding and reporting of social security contributions with authorities
  • Payslip generation and creation of annual wage tax certificates 
  • Benefits administration 
  • Management of statutory benefits 
  • Pension contributions (where required) 
  • Support with benefits such as maternity leave allowance, sick leave allowance etc
  • Compliance and risk management 
  • Insuring compliance with local labour law 
  • Management of onboarding and offboarding processes 
  • Representation in difficult legal and court cases 
  • Additional services:

Some EOR providers ( such as ThisWorks EOR Services) provide additional services such as: 

  • Work permit and dependent visa support 
  • Background checks 
  • Relocation support 
  • Value added services: support with housing, company car, banking, etc ( depending on the country). 

This vast list of services allows businesses to manage international teams, while staying compliant and avoiding complex local employment administration. 

Benefits of using an EOR service

There are multiple advantages the businesses can get from working with an Employer of Record provider.

  • Faster global hiring 

Setting up a new entity can take up to several months. With an EOR the hiring process can take several days. 

  • Reduced compliance risk 

A trustworthy EOR provider ensures the compliance with all local regulations. As the labour law varies greatly between countries, having a knowledgeable party to rely on can make a big difference. 

  • Lower expansion costs

Establishment of a new entity is not only a time-consuming process, but also costly. With EOR services these costs can be avoided. 

  • Access to global talent

The location of a remote candidate is not a problem if the company uses Employer of Record services. In other words, the best candidate for specific business purposes can be chosen. 

  • Scalable hiring model

EOR services are ideal for organisations that want to scale international hiring quickly. They are particularly useful in the following situations: 

  • Remote-first teams and organisations 
  • Companies testing new markets abroad 
  • Startups expanding internationally

How to choose the right Employer of Record

Choosing  between several EOR providers is important, as it influences not only compliance, but also employee experience for new hires and how your company is perceived on the job market. 

Here are some important things to keep in mind when deciding on your EOR partner:

  • Geographic coverage 

Make sure that EOR provider can cover the country where you want to expand globally. Read about our EOR coverage here.

  • Pricing transparency

Check that EOR provider does not have any hidden costs and the pricing is clearly outlined in your MSA. 

  • Compliance expertise 

A strong EOR provider should have a team of experienced local HR specialists who understands all in and outs of a national labour law. 

  • In-house vs partner model 

Some EOR providers rely on their third-party partners, while others manage employment directly through their own local entities. 

  • Customer support

It is important to find a EOR partner that helps with any questions or concerns in a quick and professional manner. That can be crucial when dealing with employee offboarding or any legal disputes.

Warning signs

Understanding the importance of choosing a right party, your company should be cautious of providers that lack local expertise and cannot give clear answers to your labour law questions. In addition, companies with slow response times can  prove to be unreliable in critical situations. Furthermore, providers with complex pricing models with many hidden fees can create a lack of cost transparency and result in unforeseen expenses. 

By selecting a provider with strong expertise in local labour law and reliable support from dedicated teams, your company can ensure a smooth international growth. Learn why companies choose ThisWorks as their EOR partner. 

How much does an employer of record cost

The vast coverage of services the employer of record provides makes many businesses ask how much an EOR costs. 

Pricing models vary greatly on the provider and the country of coverage, but most EORs use one or more of the following structures. 

  1. Flat monthly fee per employee. 

The EOR provider charges a fixed monthly fee for each employee they have on the payroll from the client. 

  1. Percentage of salary

While not being a popular approach, some EOR providers charge a percentage of the employee’s salary, typically ranging between 5%-15%. 

  1. Setup fees

Some providers charge onboarding or offboarding fee for each employee. 

The fee that the business needs to pay to an EOR provider also depend on the location of a service. Local labour law complexity of some countries can influence the fee. In addition, some countries have specific statutory benefits and payroll administration requirements. Furthermore, employee headcount in the specific location can influence the fee. 

EOR vs setting up a legal entity

To establish a new entity the organisations needs to go through legal and tax registration. In addition, accounting support and ongoing compliance costs such as the fees for local labour lawyers can make setting up a legal entity significantly more expensive. 

An EOR allows companies to expand globally without these upfront investments.

EOR vs hiring contractors

Some businesses decide to hire international workers as contractors. However, this approach can often lead to a misclassification risk, which can cause legal and tax liabilities. 

A professional EOR provider ensures that the new starters are compliantly onboarded under local employment regulations. 

 EOR FAQs

  • Is an EOR the same as a PEO?

No.  PEO model assumes co-employment and requires the business to already have established local entity, while EOR employs new talents through its own entity only. 

  • Can an EOR hire contractors?

While some EOR providers can support hiring contractors, it is important to remember that main function of EOR is the employment of full-time workers legally in a country. A risk of misclassification between EOR and contractor should be also considered carefully. 

  • Is an employer of record legal?

Yes, when established and structured properly, Employer of Record entities are legal and widely used for international expansion by many companies. 

  • When should you use an EOR?

The most common reason for using EOR include: 

  • Hiring employees located in another countries remotely
  • Testing new markets before establishing an entity 
  • Expanding internationally
  • Can you switch from EOR to your own entity?

Yes. Many companies initially hire through an EOR for the ease and speed of expansion and later transition employees to own legal entities upon their establishment. It is important to remember that some countries require specific procedure to be followed in such a scenario.

Get in touch with ThisWorks

Expanding your team globally does not need to be long and administratively complex. 

With the use of Employer of Record the businesses can have access to the best talent from around the world while ensuring full compliance with local labour laws. 

ThisWorks can support your global expansion with our compliant Employer of Record services. 

Contact our team to find our how we can help your international team glow fast and compliantly!

UK Skilled Worker Visa 2025: Salary Threshold Rises to £41,700 – What Applicants Need to Know

Skilled Worker Visa offered in the UK has been an important back-door for foreign professionals to live and work in Britain. However, since April 4, 2025, the regulations have changed, namely, the minimum salary level for the vast majority of applicants has increased to 41,700 per annum, against 26,200. It is one of the most significant changes in recent years, and it will affect potential applicants, UK businesses, and whole industries significantly.

According to the government, this change is a part of its general immigration policy, the objective of which is to decrease the overall migration level, which has to be supplemented by making the UK appealing to the workers with the highest skills only. However, UK Skilled Worker Visa requirements do vary with time; that’s why you should keep an eye on the updates. To the applicants, the rise translates to reassessment of whether they are qualified under the new terms or not. It implies reconsideration of recruitment budgets and plans for employers.

Throughout this guide, we will outline what the Skilled Worker Visa salary rise is, examine the new salary level, how it will affect different industries and give some real-life tips on eligibility and upcoming trends.

We’ll also show how ThisWorks can help you navigate the changes with ease.

What is the UK Skilled Worker Visa?

The UK Skilled Worker Visa 2025 enables foreign workers who are skilled in their professions to be employed in any of the eligible positions in the United Kingdom. Taking over Tier 2 (General) work visa in December 2020, it is now among the primary immigration channels of non-UK citizens to work in the UK.

An applicant has to meet the requirement of acquiring a confirmed job offer from a UK employer who is licensed as a sponsor by the Home Office. The occupation in a given job position should be among the list of qualified skilled occupations, and the candidate should be able to match the required skills and pay. There are other criteria; they include English language skill level and verification of funds that will be used to sustain you once you get into the UK.

The visa would probably last up to five years (may be extended). Visa holders are then able to submit an application for Indefinite Leave to Remain ( ILR ) – providing permanent UK residency after five years.

Although the visa can be offered in a wide variety of fields, the government, at various times, has altered its specifications to regulate migration rates. April 2025 change is one of the most significant changes in the past few years, since it plans to increase the minimum wage of the majority of jobs by more than 59 per cent.

For official details, visit the UK Government’s Skilled Worker Visa page.

Salary Threshold Change: What Does It Mean for Applicants?

Since April 4, 2025, a Skilled Worker Visa application will have an increased salary threshold of 41.7k per annum (or 20.10 per hour) in general. This is in the majority of roles that are neither on the shortage occupation nor the health or social care lists. The requirement used to be 26,200 before; that is, a person will henceforth have to earn 15,500 extra annually to be eligible.

According to the government, the change will help to reduce migration and persuade employers to target recruitment within the country. The relocation, however, also reduces the supply of foreign workers who could meet middle-range jobs.

So here is how the new salary regulations work:

  • Minimum wage expectation: 41,700 pounds sterling yearly or 20.10 pounds sterling an hour.
  • Health and social care: Pay is set at a lower threshold of 29,000 per annum or 14.39 per hour.
  • New entrant positions (people under the age of 26, training, or converting a student visa): 31,000 per year or 15,90 per hour.
  • A lesser rate may be applied to PhD-qualified candidates in the relevant area.

To a significant number of professionals, especially those in the field of education, retail management, and hospitality, this leap implies that their present viable job suggestions in the United Kingdom may be invalid unless the employers raise wages.

How the New Salary Threshold Affects Different Industries

The impacts of this increase will differ significantly across sectors.

Healthcare, Social Care:

 The lower thresholds will be an advantage to this sector, and most of the international nurses, carers, and allied health professionals will remain eligible. The wage pressure on care homes may also rise should the latter recruit non-care staff; however, such institutions, already struggling to meet their staffing requirements, may find such pressure to be worse.

Technology and Engineering:

 Most of the IT, engineering and data jobs already pay more than 41,700, hence there is not so much impact here. With that said, more minor roles and new startups with lower payment can find themselves more challenged to get abroad talent to hire.

Hospitality and Store:

 These are the industries that will be badly affected. The average wages of management positions at hospitality services are usually under 40,000, and as a result, companies cannot afford to sponsor their foreign employees. Unless they hit the new threshold, lots of employers will be forced to either recruit domestically or restructure positions.

Education:

 Specific teaching jobs will continue to be included in the shortage occupation list, but the new requirement may not be met in many positions, particularly in primary schools. This may increase the current teacher shortage in some areas of the country.

Types of Manufacture and Trades:

 High-paying specialist jobs will be qualified, but entry-level and middle jobs will fall short of the threshold, which may affect the level of productivity within the firms that depend on skilled foreign workers.

Financial and Professional Services:

Banking, consulting and law hiring will have no trouble meeting the new bar at high-salary jobs. But small companies and middle-level positions within accounting or compliance can be challenging to find global employees.

Creative and Media Industries:

Although some elements of the design industry, such as senior roles in design, film and broadcasting, could pass the test, a notable number of creative jobs, particularly the freelance and junior designs, are likely to fall below the level, which could restrict the UK’s ability to attract international creative talent.

Logistics And Transport:

Niche professions like airline pilots or senior logistics managers will pass the bar, yet most of the operational and supervisor jobs will be left out, and this may affect those industries which depend on foreign drivers or coordinators.

Are You Eligible for the New Salary Requirement?

Passing the new threshold has become the most significant challenge to applicants for the Skilled Worker Visa. To make sure of your eligibility:

Check your job offer: does the gross salary amount in 12 months come to no less than 41,700 (unless you are in an exempt category)?

Check occupation code: certain shortage occupations and health/social care occupations have lower thresholds. Your code is listed on the authorised resource for eligible occupations.

Tests Employer status: Your employer should be in the list of licensed UK visa sponsors.

Time Duration: Ensure that the number of hours worked is confirmed, part-time work is pro-rated, and it is essential to make sure that the hourly rate is within the requirements.

Look at other visa options: They are opening up other visa routes. Depending on the UK visa salary threshold requirements, you should still look at the Global Talent Visa or a student visa with post-study work permits.

Confirm Level of English: Get confirmation that you have full knowledge of the English language, having passed an accepted test or qualification.

Ensure you are financially prepared: Provide evidence that you have enough personal savings in case your employer provides no cover to take care of your initial expenses in the UK.

Prepare supporting documents: Collect employment agreements, job offer records and qualifications needed for your occupation designation.

Enquire about verifying visa validity and renewals: How long does the visa last? When do you need to renew, and how could any future applications be affected by salary increases or decreases?

It is also essential that applicants remember that to qualify to work in the US, you do not only have to meet a salary threshold, but also have to pass English language requirements, submit necessary documents and pay visa and healthcare fees.

The Future of Skilled Worker Visas: Trends to Watch in 2025

Experts in the field of immigration forecast that the overall direction of national work immigration is going to tighten in 2025. Further changes may still occur, with modifications to shortage occupation lists or possible requirements of additional sponsorship conditions being aspects that may be altered by the government in the future, to reduce net migration rates.

The major trends to be tracked:

  • Workforce: Compared to the general workforce, there is more emphasis on high-skilled employment – emphasis on technology, health care and higher-end manufacturing jobs.
  • Emergence of new roles: Employers can either increase the wages of workers or develop new senior posts to reach the limits.
  • The lack of potential sectors in supply: sectors such as hospitality and care might have a recurring shortage.
  • Domestic Talent: More use of domestic talent, including apprenticeship and training opportunities, may likewise be increased.
  • Policy changes: Policy Adjustment: Every year, the salary threshold can be checked so that it complies with inflation and other economic priorities.
  • Visa Route Diversification: Intra-skill shortage: More advertising of other Commonwealth visas, such as the Global Talent and Scale-up Worker routes.
  • Automation and use of Technology: Employers can invest more in automation and the use of Artificial Intelligence to minimise the use of foreign labour in lower-waged jobs.
  • Regional Recruitment Focus: Potential motivators for filling positions within under-represented areas outside of London and the South East.

As a candidate, it is always advisable to apply early, provided you have already met the qualifications, because rules can be adjusted quickly. Employers, on the other hand, can find working through these changes a lot easier through the use of an experienced firm like thisWorks, which is a workforce management company. Not only this, you should be updated with the latest policies and the UK visa salary threshold.

Conclusion

April 2025 is a game-changer in UK immigration policy, as there will be an upsurge in the salary threshold of the Skilled Worker Visa in the UK. That’s why, before proceeding with the process, you should know the UK immigration 2025 salary and other requirements to avoid hassle at the end. Although the situation is meant to offer a chance only to positions with greater earnings, the shift has the unavoidable consequence of depriving most of the middle-income careers.

On the part of applicants abroad, they have a clear message, which is to check their eligibility, plan their role toward meeting the threshold and get all the requirements before making an application. In the case of UK employers, they should pay attention to salary review, ensuring compliance and discovering new methods of attracting talent.

Skilled migration to the UK is getting more competitive. Being aware, making decisions in time and consulting the qualified can be the key difference between receiving a visa and failing to do so.

FAQs

  1. What is the UK Skilled Worker Visa 2025, and why is it essential for skilled workers?

 It is a type of visa which permits suitable and professional candidates abroad to work in relevant jobs in the U.K. It is significant as it offers a legal pathway to skilled migration, and it may result in permanent residency.

  1. Why has the salary threshold for the UK Skilled Worker Visa increased to £41,700?

 The UK authorities desire to limit net migration and ensure that only higher-paid and highly-skilled vacancies are occupied by foreign employees.

  1. How will the salary threshold increase affect my visa application?

 The amount you are offered in the job might not be more than 41, 700 and in that case, you might not be eligible to receive a Skilled Worker Visa as well.

4. How do I know how to pay the new Skilled Worker Visa salary threshold?

 Check your job offer, confirm your occupation code, ascertain your employer’s sponsor status and see if your hourly rate is as per the requirement.

 

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ThisWorks supports companies expanding internationally.

As an Employer of Record (EOR), we enable you to hire employees in the UK, Netherlands, Germany, Poland, and Spain  without setting up a local entity. We handle payroll, contracts, and compliance, so you can focus on growth.

Global expansion made simple.

✔ Hire internationally without foreign entities
✔ Stay fully compliant
✔ Save time and resources

Expand faster with ThisWorks.