How is the salary calculated for work permit ILR? Does £41,700 include bonus and allowances?

A salary section in a job offer letter can be divided into lines for base salary, bonus, allowances, and weekly working hours. When verifying the salary on the work permit, copy down each item separately, leaving a cell next to it to write "Can it be counted?"

Are the work permit and ILR both looking at £41,700?

According to the current rules as of September 13, 2026, this article discusses the salary thresholds for Skilled Worker (skilled workers) and their path to permanent residency. £41,700 is a threshold, and it also needs to meet the going rate (the salary specified by the job and working hours), taking the higher one; those who meet other salary options or transitional arrangements may have different thresholds. The calculation starts from the guaranteed pre-tax basic salary, and the employee's own income tax, national insurance, and pension contributions are not excluded from this amount by reducing the take-home pay. The total compensation package in the job advertisement needs to be broken down, and the employer-paid pensions, insurance, and shares cannot be combined together. First confirm the applicable salary band, then determine the income items, to see how much is really missing.

Is the bonus written into the contract not considered?

Bonuses, overtime pay, and shift allowances are not included. According to the current "Immigration Rules" Appendix Skilled Worker SW 14.2(b), it is clearly stated that whether the payment is guaranteed or not makes no difference. Therefore, the statement that "contractually promised bonuses can count towards the threshold" is not valid.

Calculation example: Base salary £39,000 plus guaranteed bonus £3,000, the deductible amount is still £39,000, with a difference of £2,700 from the standard level.

I think that such employment plans should prioritize converting the bonus budget into guaranteed basic salary. The compensation structure should be implemented in contracts and actual payroll; merely changing the name of the bonus column is not enough.

Are all the London allowances also to be completely excluded?

Housing and living allowances are generally excluded. However, section 13.1 of the Home Office "Skilled Worker caseworker guidance" edition dated 3 August 2026 specifically mentions London weighting (London area allowance): it can be counted if the sponsor confirms that it will be paid, and tax, pension, and national insurance are handled in the same way as for the basic salary. When making a judgment, HR must confirm each of these conditions in writing. Monthly fixed payments that have already been taxed are not sufficient on their own to prove that all requirements are met.

This quota is not limited to existing Tier 2 (General) holders; current Skilled Worker applications that meet the criteria can also use it.

The old Tier 2 (General) has a transitional arrangement under SW 14.5(a): applicants must continuously hold the relevant work visa sponsorship, use the same sponsor as the previous sponsorship, apply for renewal or settlement before December 1, 2026, and the allowance must be continuously paid during the validity of the sponsorship, applicable to local settled employees in the same situation. It should be checked separately from the above-mentioned London subsidy criteria.

Change to part-time, or do another one?

The main job is changed to part-time, the standard rate of £41,700 will not be discounted according to working days; it should refer to the actual pre-tax annual salary of the part-time position, and the going rate will be calculated according to working hours.

"Promote a Skilled Worker" SK7.11 notes that part-time work cannot be converted into full-time equivalent to meet the general threshold. Income from another job also cannot be added to the main job: Section 22.5 of the Case Handling Guidelines clearly states that additional employment income is not counted when applying for ILR; even if the second job has separate sponsorship, only one salary that meets the requirements can be selected, they cannot be combined. Both jobs are legal individually, but it does not mean the income can be combined.

Please have the HR confirm, what should be written specifically?

Put the following items in the same confirmation.

Please have the HR department list the position code, weekly working hours, applicable salary grade, and occupational specified salary. Then list the basic salary, bonus, and allowances item by item, clearly indicating whether each can be counted and the basis for it. The London allowance needs to be accompanied by confirmation of tax, pension, and national insurance treatment. Also check whether there are any loans repaid to the guarantor or affiliated entities, payments for operating or visa costs, or investments made. According to SW 14.2A, applicable amounts should be deducted from the salary and spread over the guarantee period. Only extra benefits voluntarily chosen and unrelated to the above costs or investments can be exempted. These payment arrangements should be submitted to HR for calculation, not just verifying the annual salary figure on the first page of the contract.

[Data Source] Home Office Current Immigration Rules' Skilled Worker Appendix Salary Provisions; "Guidance on Assessing Skilled Worker Cases" Salary Assessment and Permanent Residency Salary Chapters; "Sponsorship Guide for Skilled Workers" Salary Calculation Chapter. This article is for reference only; please consult a licensed lawyer for specific issues.

Welcome to leave a message and chat: In your pay slip, which income item do you find most uncertain whether it can be counted towards the threshold?

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