UK Work Visa Salary Review: Major Changes on the Horizon
- Burcu Köroğlu
- 5 days ago
- 5 min read
The UK's Migration Advisory Committee (MAC) has published its comprehensive review of salary requirements for work visas (in December 2025), and the recommendations could fundamentally reshape how employers recruit international talent. If you're sponsoring workers or planning to work in the UK, these proposals deserve your close attention.
The Current Problem
The UK's work visa salary system has become unnecessarily complex and, in some cases, counterproductive. When the previous government raised occupation-specific salary thresholds from the 25th percentile to the median in April 2024, the intention was to reduce net migration. However, this created unintended consequences:
Geographic inequality: Outside London, many employers struggle to meet the higher thresholds due to regional wage differences.
Job title complications: Within single occupations, different job roles have vastly different salaries. For example, "Software developers" earn a median of £44,900, but they're competing against the occupation threshold of £54,700 skewed upward by roles like "Solutions architects" earning £80,100.
Perverse prioritisation: The system inadvertently favours lower-paid occupations. An employer can sponsor a Librarian at £41,700 but cannot hire an IT director earning £85,000 (because the occupational median is £86,000).
The MAC's Core Recommendations
1. Return Occupation-Specific Thresholds to the 25th Percentile
The MAC argues that occupation-specific thresholds should prevent undercutting of domestic workers nothing more. Setting them at the median goes too far, excluding legitimate jobs and entire regions from using the immigration system.
The recommendation: Reduce occupation-specific thresholds back to the 25th percentile of each occupation's earnings.
2. Let the General Threshold Do the Work
Rather than using occupation-specific thresholds to control migration numbers, the general threshold should handle this task. The MAC presents several options:
Option 1 (MAC's preference): Keep the general threshold at £41,700 with occupation-specific thresholds at the 25th percentile.
Impact: Estimated lifetime fiscal benefit of £660 million per annual cohort
Net migration impact: Increase of approximately 4,000 people annually
Rationale: Maximises fiscal contribution, supports Industrial Strategy sectors, reflects regional wage variation
Option 2 (compromise): Raise the general threshold to £48,400 with occupation-specific thresholds at the 25th percentile.
Impact: Broadly neutral on both net migration and fiscal contribution
Rationale: Would mean effective thresholds rise for majority of occupations while still allowing regional variation
Option 3 (status quo, not recommended): Keep current arrangement (general threshold £41,700, occupation-specific at median).
Problem: Creates the issues outlined above
The MAC warns that raising thresholds further (to £52,500) would cost the UK between £520-710 million in lost fiscal contributions per annual cohort by excluding beneficial migrants.
The New Entrant Discount: A Complex Challenge
Currently, "new entrants" (typically under-26s or recent graduates) can access lower thresholds for four years. The MAC highlights a significant problem: it now takes longer than four years for new entrants to reach standard thresholds.
Current new entrant threshold: £33,400
How long to reach the undiscounted threshold?
With MAC's recommended thresholds (25th percentile OST, £41,700 GT): 6 years
With higher thresholds (median OST, £48,400 GT): 9-16 years
This creates real problems for employers who want to recruit graduates into training programmes. The MAC recommends:
Keep the new entrant rate at £33,400 (roughly matching graduate starting salaries)
Duration depends on government's chosen thresholds - but could be 6+ years
This interacts with settlement policy - currently being consulted on separately
Many employers told the MAC they're already paying migrant workers more than British workers in identical roles just to meet threshold requirements—an equity issue within workforces.
Abolish the PhD Discount
The MAC found no evidence that PhD holders earn less than other workers. In fact, they typically earn around 7% more. The current PhD discount (allowing 10-20% lower salaries) therefore has no justification.
Recommendation: Abolish the PhD discount entirely.
The separate postdoctoral discount for specific research roles may be justified to support the UK's research base, but if retained, it should be set at £41,700 (not as a percentage).
Regional Thresholds? No.
The MAC considered but rejected regional salary thresholds. Their reasoning:
Wages vary more within regions than between them
Even regional thresholds would exclude many local areas
Would add complexity and enforcement challenges
Risks institutionalising some UK areas as "lower wage"
Median salaries differ by only £2,800 between London-inclusive and London-exclusive calculations
The Temporary Shortage List (TSL)
For mid-skilled RQF 3-5 occupations crucial to Industrial Strategy sectors:
General threshold: Minimum £30,900 (enough for a reasonable standard of living)
Occupation-specific thresholds: Set at the median (higher than Skilled Worker route)
Why higher? The TSL is designed to address shortage occupations while incentivising domestic recruitment and skills investment. Higher thresholds serve this purpose.
No discounts: TSL should recruit experienced, fully-competent workers, not provide a pathway for younger workers.
Global Business Mobility: Tighten Up
The MAC notes that GBM visas should reflect that workers are genuinely "senior or specialist." Current thresholds (25th percentile) are too low to ensure this.
Recommendation: Raise GBM occupation-specific thresholds to the median to better reflect seniority.
Health & Care Workers and Pay Scales
For NHS and teaching roles paid on national pay scales, the system must remain accessible or these sectors cannot function.
Recommendation for healthcare: Set the general threshold at the bottom of NHS Band 5 (currently £29,970 in Northern Ireland, the lowest across UK nations).
Why? This maintains the principle that pay scales act as occupation-specific thresholds while updating for the RQF 6+ skill requirement.
This arrangement continues to give public sector preferential treatment over private sector—a political choice that places "most of the burden of adjustment on private sector employers."
Women Disproportionately Affected
The MAC found that women's earnings cluster more tightly around thresholds than men's, making them more vulnerable to threshold increases. This reflects both:
Occupational sorting (women concentrated in roles with tighter wage clustering)
Within-occupation differences (women's salaries bunch closer to thresholds even in the same occupation)
Higher thresholds will have gendered impacts the government should consider.
What Happens Next?
These are recommendations, not confirmed policy. The government must now decide:
Which general threshold level balances fiscal contribution, net migration targets, and Industrial Strategy needs
How long new entrant eligibility should last and how it interacts with settlement policy
Whether to simplify the system by accepting the 25th percentile recommendation
Regional impacts they're willing to accept
The Fiscal Reality
A crucial finding: The top 10% of Skilled Worker earners contribute 39% of the route's total fiscal benefit. The bottom 10% contribute just 1%.
The previous government's threshold increases already excluded the lowest earners. Going higher would be fiscally costly because you'd start excluding net-positive contributors.
Nearly all current Skilled Workers are projected to be fiscally positive over their lifetimes. The April 2024 increases achieved that goal. Further increases risk fiscal harm.
What This Means for Employers
If thresholds are reduced to 25th percentile:
Greater access for regional employers outside London
Ability to hire across more job titles within occupations
More equitable pay within workforces (less need to pay migrants more than British workers)
Higher-earning occupations regain access
If thresholds rise:
Continued regional disadvantage
Potential loss of Industrial Strategy recruitment
Continued pay equity issues within organisations
Fiscal cost to UK
What This Means for Applicants
New graduates: May get longer to reach undiscounted thresholds, but uncertainty remains
PhD holders: Likely to lose the discount (though they typically earn enough anyway)
Healthcare workers: NHS recruitment should continue largely unchanged
Mid-skilled workers: TSL may provide pathway, but at higher thresholds than before
The MAC's recommendations seek to rationalise an increasingly dysfunctional system. The core insight is simple: occupation-specific thresholds should prevent undercutting; general thresholds should control migration numbers and fiscal impact. Mixing these functions creates perverse outcomes.
The government faces genuine trade-offs between net migration targets, fiscal sustainability, regional equity, and Industrial Strategy delivery. There's no cost-free option.
What's clear is that the current system, with median occupation-specific thresholds, achieves neither fairness nor efficiency. Whether the government accepts the MAC's recommendations remains to be seen, but the case for change is compelling.
Need advice on how potential threshold changes could affect your sponsorship strategy or visa application? Get in touch for expert immigration guidance.
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