Cost of employing

Cost of employing someone in the UK by salary (2026/27)

This page is for people searching cost of employing someone or how much does it cost to employ someone in the UK. Enter a salary below for the instant total employer cost, or pick a common salary for a full breakdown. For overheads or Employment Allowance too, use the full employer cost calculator.

£
Total cost to employ on £35,000
£40,363 / year
Salary
£35,000
Employer NI
£4,500
Pension (3%)
£863
Monthly cost
£3,364
% above salary
15.3%

Baseline cost for 2026/27: salary + employer NI (15% above £5,000) + minimum 3% workplace pension on qualifying earnings. Excludes overheads, recruitment and the £10,500 Employment Allowance. Estimates only.

Quick answers — employer cost in 2026/27
£25,000 salary: ~£28,563/yr total employer cost
£30,000 salary: ~£34,463/yr total employer cost
£35,000 salary: ~£40,363/yr total employer cost
£40,000 salary: ~£46,263/yr total employer cost
£50,000 salary: ~£58,063/yr total employer cost
£75,000 salary: ~£86,821/yr total employer cost

Formula: salary + (salary − £5,000) × 15% NI + (qualifying earnings) × 3% pension. No overheads or Employment Allowance applied above.

Employer cost quick reference (2026/27)

Salary Employer NI Pension (3%) Total cost % above salary
£20,000 £2,250 £413 £22,663 +13.3%
£25,000 £3,000 £563 £28,563 +14.3%
£30,000 £3,750 £713 £34,463 +14.9%
£35,000 £4,500 £863 £40,363 +15.3%
£40,000 £5,250 £1,013 £46,263 +15.7%
£50,000 £6,750 £1,313 £58,063 +16.1%
£60,000 £8,250 £1,321 £69,571 +16.0%
£75,000 £10,500 £1,321 £86,821 +15.8%
£100,000 £14,250 £1,321 £115,571 +15.6%

Employer NI: 15% above £5,000. Pension: 3% of qualifying earnings (£6,240–£50,270). No Employment Allowance applied.

Worked example: the true cost of a £30,000 employee

A £30,000 salary costs considerably more than £30,000 to a UK employer in 2026/27.

Cost component Annual Monthly
Gross salary £30,000 £2,500
Employer NI (15% × £25,000) £3,750 £313
Pension (3% × £23,760 qualifying) £713 £59
Total employer cost £34,463 £2,872

NI: 15% above £5,000 threshold (£30,000 − £5,000 = £25,000 × 15%). Pension: qualifying earnings £6,240–£30,000 = £23,760 × 3%. No Employment Allowance or overheads.

How it works

1. Choose salary

Open a salary page to get baseline statutory employer cost.

2. Review NI + pension

Check each component separately before looking at the all-in total.

3. Move to full calculator

Add overheads and allowance to convert baseline into hiring budget reality.

£18,000 £19,000 £20,000 £21,000 £22,000 £23,000 £24,000 £25,000 £26,000 £27,000 £28,000 £29,000 £30,000 £31,000 £32,000 £33,000 £34,000 £35,000 £36,000 £37,000 £38,000 £39,000 £40,000 £41,000 £42,000 £43,000 £44,000 £45,000 £46,000 £47,000 £48,000 £49,000 £50,000 £51,000 £52,000 £53,000 £54,000 £55,000 £56,000 £57,000 £58,000 £59,000 £60,000 £61,000 £62,000 £63,000 £64,000 £65,000 £66,000 £67,000 £68,000 £69,000 £70,000 £71,000 £72,000 £73,000 £74,000 £75,000 £80,000 £85,000 £90,000 £95,000 £100,000 £110,000 £120,000 £130,000 £140,000 £150,000 £155,000 £160,000 £165,000 £170,000 £175,000 £180,000 £185,000 £190,000 £195,000 £196,000 £200,000

Need a salary not listed? Use the full employer cost calculator for any amount. Want NI only? Go to employer NI by salary. Planning a whole team? Use the payroll planner.

Choose the right page for the job

Cost of employing by salary

Best if you want a fast answer for a specific salary such as £30,000, £35,000 or £50,000.

Full employer cost calculator

Best if you need custom pension, overheads, hourly pay or Employment Allowance assumptions.

Employer NI by salary

Best if your query is specifically about employer NI rather than total salary cost to employer.

Hiring cost playbook for 2026/27 budgets

For ranking pages to be useful, they need to answer the decision question, not just the formula. Use this framework when reviewing offers or headcount requests: baseline statutory cost first, then realistic overhead assumptions, then allowance eligibility.

Step 1: Statutory floor

Calculate salary + employer NI + minimum pension. This is the minimum compliant recurring cost before local policy or benefits.

Step 2: Operational reality

Layer software, equipment, training and workspace. This is where “£35k salary” often becomes £43k+ total employer spend.

Step 3: NI rise impact

Compare against 2024/25 assumptions to quantify budget drift caused by the April 2025 NI rate and threshold changes.

Step 4: Allowance check

Apply Employment Allowance where eligible. For smaller employers this can materially reduce the net NI increase.

How it works

What goes into the true cost of employing someone

The formula

Total employer cost = salary + employer NI + employer pension. Employer NI is 15% of earnings above the £5,000 secondary threshold. Employer pension is 3% of qualifying earnings between £6,240 and £50,270 under auto-enrolment rules. No upper earnings limit applies to employer NI.

What changed in April 2025

The employer NI rate rose from 13.8% to 15% and the secondary threshold dropped from £9,100 to £5,000 — adding up to £1,500 per employee per year for many employers. Employment Allowance rose from £5,000 to £10,500 (with the £100,000 eligibility cap removed) to partially offset costs for eligible small employers.

Employment Allowance

Eligible employers can claim up to £10,500 off their employer NI bill per year (2026/27). Most limited companies with at least one employee who is not a sole director qualify. This effectively reduces employer NI to zero for smaller employers up to a certain payroll size.

Other employer costs

Beyond NI and pension, real employer costs include recruitment (typically £2,000–£5,000 per hire), training, equipment, workspace, and benefits such as health insurance or enhanced pension. The full calculator focuses on the statutory minimums — the guaranteed floor of what each employee costs.

Mandatory vs optional and indirect employer costs

The calculator covers the mandatory statutory costs every UK employer must pay. Optional and indirect costs vary by role and business — add them as overheads for a full picture.

Cost Type Notes
Gross salary Mandatory The contractual headline pay
Employer National Insurance Mandatory 15% on earnings above £5,000, no upper cap
Employer pension (auto-enrolment) Mandatory Minimum 3% of qualifying earnings (£6,240–£50,270)
Apprenticeship Levy Mandatory if pay bill > £3m 0.5% of the annual pay bill above £3 million
Recruitment Optional / one-off Job adverts and agency fees (often 10–20% of salary)
Equipment & software Optional Laptop, phone, licences (typically £900–£2,700/yr)
Training & bonuses Optional Development, commission, private healthcare
Workspace, management time & insurance Indirect Desk, utilities, supervision, employers' liability cover

Mandatory on-costs alone add roughly 13–20% to gross salary. Optional and indirect costs are business-specific — model them as overheads in the full calculator.

Stop doing this by hand — Sage Payroll works out employer NI, pension auto-enrolment, statutory sick and maternity pay and files RTI to HMRC automatically for UK employers. Try Sage Payroll →

Affiliate link — we may earn a commission if you sign up, at no extra cost to you.

FAQ

Cost of employing someone — frequently asked questions

What is the true cost of employing someone in the UK? +

The true employer cost is salary plus employer National Insurance (15% above £5,000 for 2026/27) plus employer pension (minimum 3% of qualifying earnings) plus any overhead costs such as equipment, software or workspace. For a £35,000 salary with standard pension and no overheads, total employer cost is approximately £40,363 — about 15% above the headline salary.

How does employer cost change above £50,270? +

Employer NI continues at 15% above the threshold with no upper cap — unlike employee NI which drops to 2% above £50,270. Pension qualifying earnings are capped at £50,270, so employer pension contributions stop increasing above that level. This means employer NI becomes a larger portion of total cost for higher salaries.

What is auto-enrolment and what does it cost employers? +

Auto-enrolment requires employers to enrol eligible workers into a workplace pension and make contributions. The minimum employer contribution is 3% of qualifying earnings between £6,240 and £50,270 per year. For a £35,000 salary, qualifying earnings are £28,760 and minimum employer pension is £862.80 per year. Employers can pay more, but 3% is the statutory minimum.

Do these costs include recruitment and training? +

These pages show the recurring employer cost — salary, NI, pension — not one-off hiring costs. Recruitment fees, onboarding, training, and equipment are additional. Use the full employer cost calculator at /calculator to add an overhead figure that captures your organisation-specific costs per head.

Can I use this as a hiring budget calculator? +

Yes. These pages are designed as a practical hiring budget baseline: salary + employer NI + minimum pension. For role approval workflows, start with these baseline figures and then add your internal overhead assumptions in the full calculator.

Why did employer cost jump in 2026/27? +

The jump comes from the April 2025 NI policy change: rate up from 13.8% to 15% and threshold down from £9,100 to £5,000. This raises recurring payroll cost even before discretionary benefits or one-off hiring spend.

Where can I see salary cost to employer for the most common UK salaries? +

The /salary-costs hub shows 11 key salaries — from £15,000 to £100,000 — with employer NI and pension for each. It is designed as a quick reference for headcount budgeting and hiring approvals.

What are employee on-costs? +

Employee on-costs are the costs an employer pays on top of an employee's gross salary. The mandatory on-costs are employer National Insurance (15% on earnings above £5,000) and the auto-enrolment pension contribution (minimum 3% of qualifying earnings). On a £35,000 salary, mandatory on-costs are about £5,363 a year — £4,500 employer NI plus £863 pension, roughly 15% above salary. Wider on-costs such as recruitment, equipment, software, training and workspace are not statutory but add to the true cost of employment.

Figures reviewed for the 2026/27 tax year (last updated July 2026). Source: GOV.UK.

Related tools and guides

Want the employee's take-home view? AfterTaxSalary.co.uk calculates net pay after income tax and employee NI for any UK salary.