Updated for 2026/27

Cost to Employer Calculator UK — NI, Pension & Total Salary Cost (2026/27)

Enter any salary for the exact employer NI, pension and overhead breakdown — updated for 2026/27.

Calculate employer costs
15% employer NI rate £5,000 secondary threshold £10,500 Employment Allowance Updated April 2025 Free to use Employee take-home? → AfterTaxSalary.co.uk

Employer NI & Total Cost Calculator

Adjust the salary — results update instantly.

Tax year 2026/27
Min. 3% on qualifying earnings (£6,240–£50,270).
Equipment, software, workspace, training, etc.
Most single-director companies cannot claim.
£43,363 total / year £3,614
Annual employer cost
£43,363
Monthly employer cost
£3,614
Cost above salary
£8,363
Salary £35,000 80.7%
Employer NI £4,500 10.4%
Pension £863 2.0%
Overheads £3,000 6.9%
How it works

Three quick steps to estimate employer cost

01

Set salary and pension

Enter gross salary, then choose employer pension rate for a realistic statutory baseline.

02

Add overheads and allowance

Include software, equipment and workspace costs, then apply Employment Allowance if eligible.

03

Use monthly and annual totals

Review total employer cost, NI split and cost-above-salary before approving hires.

Calculators

All employer calculators

12 live tools covering employer cost, payroll obligations and HR calculations. All updated for 2026/27 rates.

Employer NI & Total Cost

Salary + NI at 15% + pension + overheads. Full employer cost with band breakdown for 2026/27.

Employer NI by Salary

Ready-made NI calculations at 48 salary levels. Shareable pages updated for the April 2025 rate change.

Holiday Entitlement

Statutory and contractual holiday for full-time, part-time and mid-year starters.

Redundancy Pay

Statutory redundancy by age, service years and weekly pay. Includes PILON and tax treatment.

Statutory Maternity Pay

6-week higher rate + 33-week lower rate. Employer cost and SMP recovery.

Notice Period

Statutory vs contractual notice, exact end dates, and payment in lieu of notice.

Settlement Agreement

Estimate settlement value including notice, redundancy, compensatory amounts and tax treatment.

Pro Rata Salary

Convert full-time salary to part-time equivalent by days or hours per week.

Statutory Sick Pay

SSP eligibility, waiting days, weekly amounts and duration for 2026/27.

Employer Pension Cost

Auto-enrolment costs on qualifying earnings. Employer minimum, total minimum and opt-out rates.

Bradford Factor

Absence scoring for HR teams. Input episodes and days to calculate Bradford Factor score.

Unfair Dismissal Compensation

Basic award + compensatory award estimates. Updated for Employment Rights Act 2025 changes.

Cost pages

Employer cost by salary

Pre-calculated employer cost at every salary level — NI, pension and total cost. Updated for 2026/27.

£20,000 £25,000 £28,000 £30,000 £32,000 £35,000 £38,000 £40,000 £45,000 £50,000 £60,000 £75,000 £100,000 £150,000
See all salary levels →

Employer NI on specific salaries

NI on £20k NI on £25k NI on £30k NI on £35k NI on £40k NI on £45k NI on £50k NI on £60k NI on £75k NI on £100k
See all NI calculations →

How to use this as an NI rise calculator

If you are budgeting after the April 2025 changes, compare a salary in three steps: check employer NI at 15% above £5,000, check minimum pension at 3% of qualifying earnings, then compare against your old 2024/25 baseline. This gives a realistic year-on-year increase you can use in hiring approvals and cashflow planning.

Common employer cost scenarios

Quick answers for specific hiring situations — each uses 2026/27 rates and links to the full calculator.

Hiring your first employee Part-time employee cost Employer salary cost calculator First employee guide Part-time hiring guide Minimum wage employer cost
Guides

Employer guides

Practical guides for UK employers and HR teams. Written for decision-making, not theory.

Employer NI

Employer NI increase April 2025 — what changed and what it costs

15% rate, £5,000 threshold, Employment Allowance increase. Impact on your payroll.

Hiring

The true cost of hiring an employee in the UK (2026/27)

Beyond salary: NI, pension, recruitment, onboarding, equipment and hidden costs.

Tax relief

Employment Allowance 2026/27 — eligibility, claiming and examples

£10,500 maximum. Who qualifies, how to claim, and common mistakes.

Pensions

Auto-enrolment pension costs for employers explained

Minimum contributions, qualifying earnings, opt-out rates and cost modelling.

Redundancy

Redundancy process and costs — employer guide

Statutory pay, consultation requirements, notice periods and settlement alternatives.

Legislation

Employment Rights Act 2025 — what employers need to know

Day-one rights, unfair dismissal changes, zero-hours reforms and implementation timeline.

Cost planning

Employer on-costs explained — NI, pension, holiday and overheads

All the costs above salary. What employers actually pay beyond the headline number.

London

Cost of hiring in London (2026/27)

London salary benchmarks, employer NI and total hiring costs with worked examples.

Manchester

Cost of hiring in Manchester (2026/27)

Manchester salary benchmarks and employer NI at common pay levels.

Edinburgh

Cost of hiring in Edinburgh (2026/27)

Edinburgh salary benchmarks and employer NI. Employer NI is UK-wide — Scottish income tax does not affect employer costs.

Cardiff

Cost of hiring in Cardiff (2026/27)

Cardiff salary benchmarks and total hiring costs at common Welsh salary levels.

Payroll tools

Best payroll software for UK small businesses (2026/27)

Compare Xero, QuickBooks, Sage, FreeAgent and Employment Hero — once your employer cost model is done, this is the next step.

Sheffield

Cost of hiring in Sheffield (2026/27)

Sheffield salary benchmarks in manufacturing, engineering and digital, with employer NI and total above-salary cost.

Nottingham

Cost of hiring in Nottingham (2026/27)

Nottingham employer costs across healthcare, retail and professional services. Worked examples at common salary levels.

First hire

Cost of hiring your first employee in the UK (2026/27)

True cost breakdown for first-time employers: NI, pension, Employment Allowance eligibility and practical setup checklist.

Part-time

Cost of employing part-time staff UK (2026/27)

Employer NI and pension rules for part-time workers. The £5,000 NI threshold is not pro-rated — see what that means in practice.

View all guides →

Frequently asked questions

How much does it cost to employ someone in the UK?
The true cost to employ someone in the UK is typically 15–20% above gross salary. For a £30,000 salary: employer NI £3,750 + pension £713 = approximately £34,463 per year. For a £50,000 salary: employer NI £6,750 + pension £1,313 = approximately £58,063 per year. Add workplace overheads (office space, equipment, management time) of £2,000–£5,000 and the total can reach 20–25% above headline salary. Use the calculator above to model any specific salary.
What is the employer NI rate for 2026/27?
Employers pay 15% National Insurance on employee earnings above the secondary threshold of £5,000 per year (£96 per week, £416 per month). This rate increased from 13.8% in April 2025, and the threshold was reduced from £9,100 to £5,000 at the same time. The combined effect means significantly higher employer costs, particularly for lower-paid employees where the threshold reduction has proportionally more impact.
What is Employment Allowance and can I claim it?
Employment Allowance lets eligible employers reduce their annual employer NI bill by up to £10,500 for 2026/27. This was increased from £5,000 in 2024/25. The previous £100,000 eligibility cap has been removed, so more businesses can now claim. However, companies with only one employee who is also a director cannot claim. You apply through your payroll software by ticking the Employment Allowance indicator on your Employer Payment Summary.
How much does it really cost to employ someone on £35,000?
On a £35,000 salary, expect to pay approximately £4,500 in employer NI (15% on earnings above £5,000), plus around £863 in auto-enrolment pension contributions (3% on qualifying earnings of £28,760), plus workplace overheads typically £2,000–£5,000. Total cost is usually £41,000–£44,000 per year — roughly 17–26% above the headline salary. Use the calculator above with your specific figures to get a precise estimate.
How is employer NI calculated?
Employer NI is charged at 15% on all employee earnings above the secondary threshold of £5,000 per year. There is no upper earnings limit for employer NI — unlike employee NI, which drops to 2% above £50,270, employers continue to pay 15% on all earnings above the threshold with no cap. Reduced rates apply for employees under 21 and apprentices under 25 (0% up to the upper secondary threshold of £50,270).
What changed in April 2025 for employer costs?
Three changes took effect from 6 April 2025: the employer NI rate increased from 13.8% to 15%, the secondary threshold was cut from £9,100 to £5,000, and Employment Allowance rose from £5,000 to £10,500 (with the £100,000 eligibility cap removed). For an employee on £30,000, annual employer NI went from approximately £2,884 to £3,750 — an increase of about £866 per year. Smaller employers who can claim Employment Allowance may offset some or all of this increase.
How much does it cost to employ someone part-time?
Part-time employees carry the same employer NI threshold (£5,000 per year) and pension rules as full-time staff — neither is pro-rated for hours. A part-time worker on £16,000 per year costs an employer approximately £17,943 in total: £1,650 employer NI (15% above £5,000) plus £292 minimum pension. For salaries below £10,000, auto-enrolment does not apply automatically — but the worker can opt in. See the part-time employee cost page for worked examples.
What does it cost to hire your first employee in the UK?
The recurring cost of your first employee includes salary, employer NI (15% above £5,000) and auto-enrolment pension (3% minimum). Most first-time employers can also claim Employment Allowance — up to £10,500 off employer NI per year — which may eliminate your entire NI bill at lower salary levels. At £30,000 salary with allowance, true recurring employer cost is approximately £30,714 per year. Without the allowance, the same hire costs approximately £34,464. See the first employee cost page for a full breakdown.
What does a minimum wage employee cost an employer?
A full-time employee on the 2026/27 National Living Wage (£12.71/hr, approximately £24,785/year for a 37.5-hour week) costs an employer approximately £28,309 per year before overheads: £23,810 salary plus £2,968 employer NI plus £556 minimum pension. With Employment Allowance, the NI can be offset entirely for eligible small employers. See the minimum wage employer cost page for the full breakdown.

UK employer cost: key facts for 2026/27

Quick reference for UK employer NI, pension and total hiring cost calculations.

Employer NI 2026/27

15% on earnings above the £5,000 secondary threshold (£96/week). No upper cap. Rate was 13.8% above £9,100 in 2024/25. Reduced rate of 0% up to £50,270 for under-21s and apprentices under 25.

Auto-enrolment pension

Minimum employer contribution: 3% on qualifying earnings (£6,240–£50,270 band). Total minimum: 8% (employer 3% + employee 5%). Triggers for eligible employees aged 22–state pension age earning over £10,000/year.

Employment Allowance

Eligible employers can offset up to £10,500 of employer NI per tax year (increased from £5,000 in 2024/25). The £100,000 eligibility cap has been removed. Single-director companies without other employees remain excluded.

Common salary costs

£25k: ~£28,563/yr · £30k: ~£34,463/yr · £35k: ~£40,363/yr · £50k: ~£58,063/yr · £75k: ~£86,813/yr. Includes employer NI + 3% pension.

Tools

Tools worth considering

If you are moving from estimating employer costs to actually running payroll, accounting or staff administration, these are types of tools commonly used by UK employers. We do not endorse any specific product — this is an editorial summary only.

Xero Payroll

Cloud payroll bundled with Xero accounting. Handles RTI submissions, auto-enrolment and payslip generation. Commonly used by UK small businesses already on Xero for bookkeeping.

See Xero Payroll →
QuickBooks Payroll

Payroll add-on for QuickBooks. Used by UK small employers for PAYE, NI, pension and HMRC RTI. Integrates with QuickBooks accounting.

See QuickBooks Payroll →
Sage Payroll

Long-established UK payroll software with HMRC recognition. Works standalone (without Sage accounting) and is widely used in small businesses and accountancy practices.

See Sage Payroll →
Employment Hero

HR and payroll platform used by growing UK teams. Combines contracts, onboarding, leave management and payroll in one system. HMRC RTI integrated.

See Employment Hero →
Calculator suite

Two more tools in the same suite

EmployerCalculator is part of a family of three UK financial calculators built to work together.

AfterTaxSalary.co.uk
UK take-home pay calculator
PAYE income tax, National Insurance, student loan and pension deductions — from the employee's perspective.
Visit AfterTaxSalary.co.uk →
HomeBuyingCosts.co.uk
UK home buying cost calculator
Stamp duty (SDLT, LBTT, LTT), solicitor fees, surveys and total cash needed — before you make your offer.
Visit HomeBuyingCosts.co.uk →
Total employer cost
£43,363
£3,614 / month
23.9% above salary
Back to calculator