Employing someone costs about 14% to 16% more than their salary in 2026/27: the salary, plus employer National Insurance at 15% on pay above £5,000, plus at least 3% pension on earnings between £6,240 and £50,270. A £30,000 hire costs £34,462.80 a year (£3,750 NI + £712.80 pension) and £35,000 costs £40,362.80. Employment Allowance can take up to £10,500 off the NI.
Enter a salary below for the instant total, or pick a common salary for a full breakdown. National Insurance only? See employer NI by salary. For overheads or Employment Allowance, use the full employer cost calculator. Hiring for the first time? Start with the first-time employer checklist.
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.
Formula: salary + (salary − £5,000) × 15% NI + (qualifying earnings) × 3% pension. No overheads or Employment Allowance applied above.
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| 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.
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.
Open a salary page to get baseline statutory employer cost.
Check each component separately before looking at the all-in total.
Add overheads and allowance to convert baseline into hiring budget reality.
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.
Best if you want a fast answer for a specific salary such as £30,000, £35,000 or £50,000.
Best if you need custom pension, overheads, hourly pay or Employment Allowance assumptions.
Best if your query is specifically about employer NI rather than total salary cost to employer.
"How much does it cost to employ someone" has four layers, and only the first is the number on the job advert. The first three are the same for every UK employer in 2026/27; the fourth is where businesses differ. Working through them in order is the quickest way to turn a salary into a budget you can sign off.
The contractual figure. For hourly staff, convert it honestly: £12.71 an hour (the 2026/27 National Living Wage) on a 37.5-hour week is £24,784.50 a year, not £12.71 × 40 × 48. Paid holiday is part of the salary, so use all 52 weeks.
15% of everything above £5,000 a year, with no upper cap — £3,750 on a £30,000 salary, £6,750 on £50,000. Employees under 21 and apprentices under 25 are 0% up to £50,270, and Employment Allowance removes up to £10,500 a year for eligible employers. Full rates →
Auto-enrolment obliges a minimum 3% employer contribution — but only on qualifying earnings between £6,240 and £50,270, not the whole salary. That is £712.80 at £30,000 and £1,320.90 at any salary of £50,270 or more, where it stops rising. Staff must be 22 or over and earning above £10,000 to be enrolled automatically.
Not statutory, but real cash: equipment and software (£900–£2,700 a year), workspace, employers' liability insurance, training, payroll administration, and recruitment at 10–20% of salary in the first year. Budget £2,000–£5,000 a year per office-based head, plus cover for holiday and sickness in shift-based roles.
Layers 1–3 give the statutory floor of about 13–16% above salary — the figure in the calculator and table above. Layer 4 typically takes the real total to 20–30% above the headline salary.
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.
Calculate salary + employer NI + minimum pension. This is the minimum compliant recurring cost before local policy or benefits.
Layer software, equipment, training and workspace. This is where “£35k salary” often becomes £43k+ total employer spend.
Compare against 2024/25 assumptions to quantify budget drift caused by the April 2025 NI rate and threshold changes.
Apply Employment Allowance where eligible. For smaller employers this can materially reduce the net NI increase.
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.
The employer NI rate rose from 13.8% to 15% and the secondary threshold dropped from £9,100 to £5,000 — adding about £866 a year per employee on a £30,000 salary and £1,106 on £50,000 (the increase grows with pay, with no cap). Employment Allowance rose from £5,000 to £10,500 (with the previous NI-bill eligibility cap removed) to partially offset costs for eligible small employers.
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.
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.
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 →
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Figures reviewed for the 2026/27 tax year (last updated July 2026). Source: GOV.UK.
Want the employee's take-home view? AfterTaxSalary.co.uk calculates net pay after income tax and employee NI for any UK salary.
Written and reviewed by James Whitfield and the editorial team.
Every figure is checked against current HMRC and GOV.UK guidance and reviewed for the 2026/27 tax year. We explain the numbers in plain English with worked examples. Editorial standards · About us