The country's Border Agency awarded a contract earlier this year as it tries to find up to 170,000 immigrants who have gone missing.
Services company Capita, who won the bid, will be paid according to how many are discovered. The cases will then be handed over to immigration officers who will try to remove them from the country, The Daily Mail reported.
Border chiefs are struggling to deal with the backlog of cases in the Migration Refusal Pool, which is made up of migrants whose appeals to extend their work or student visas were turned down, it said.
Border Agency chief executive Rob Whiteman revealed the existence of the contract yesterday before the Home Affairs Committee.
He told MPs that a trial scheme operated by another company, Serco, found one in five of those contacted left the country within six months.
"The contract is a payment by results, where they will make contact with potential over stayers from our records.
"The potential value of the contract, if they performed very well over a four-year period, would be around 40 million pounds.
"Capita will be paid for the number of people who they make contact with and leave. If nobody leaves, because they make contact with them, nobody will get paid," he was quoted as saying.
