Construction sector
Cost of employing construction workers UK (2026/27)
Construction employment spans a wide salary range — from general labourers earning close to the National Living Wage to experienced site managers and senior engineers commanding £55,000–£70,000 or more. At a mid-market salary of £35,000 (common for an experienced tradesperson such as a joiner, electrician or plumber), total employer cost in 2026/27 is approximately £40,363 before overheads — £35,000 salary plus £4,500 employer NI and £863 minimum pension. For site managers at £50,000, total employer cost before overheads is approximately £58,072 per year. Many construction businesses also use CIS subcontractor arrangements for self-employed workers, which have a different cost and NI structure.
UK scope: England, Scotland, Wales and Northern Ireland employer payroll planning for the 2026/27 tax year.
Sample total cost
£40,363
£3,364 per month on £35,000 salary
Employer NI
£4,500
15% above £5,000 secondary threshold (2026/27)
Pension + overheads
£863
Baseline employer pension plus configured overheads
Key assumptions — UK 2026/27
Employer NI: 15% on earnings above the £5,000 secondary threshold
Employer pension: minimum 3% on qualifying earnings £6,240–£50,270
Employment Allowance: up to £10,500 off the NI bill for eligible employers
Worked examples: £30k salary → £34,464/yr · £35k → £40,363/yr · £50k → £58,063/yr
What this page helps you check
- General labourer: ~£24,000–£28,000. Employer NI: £2,850–£3,450.
- Experienced tradesperson (electrician, plumber, joiner): £32,000–£45,000.
- CSCS-qualified specialist: £35,000–£55,000.
- Site manager / project manager: £45,000–£70,000.
- Employer NI on £35,000: approximately £4,500/year (15% above £5,000).
- CIS subcontractors (self-employed): no employer NI or pension obligation.
UK assumptions used
Employer NI
15% above £5,000 secondary threshold for 2026/27.
Auto-enrolment pension
Minimum employer contribution 3% on qualifying earnings.
Employment Allowance
Up to £10,500 relief in 2026/27 for eligible employers.
Frequently asked questions
What is the difference in cost between employing PAYE and CIS subcontractors in construction?
A PAYE employee at £35,000 costs an employer approximately £40,363/year in salary, NI and pension. A CIS self-employed subcontractor does not generate employer NI or pension costs — you simply pay the agreed rate. However, CIS workers must be genuinely self-employed (HMRC applies specific tests). Falsely categorising employees as self-employed carries significant penalties including back-payment of NI and interest.
How much employer NI is due on a construction site manager salary?
A site manager earning £50,000 per year generates £6,750 in employer NI (15% of £45,000 above the £5,000 threshold) plus approximately £1,322 minimum pension on qualifying earnings. Total employer cost before overheads: approximately £58,072 per year. At £60,000 salary, total employer cost rises to approximately £70,072.
Does the Construction Industry Scheme affect employer NI?
CIS affects income tax deductions from payments to subcontractors, not employer NI. CIS only applies to payments for construction work to self-employed workers or subcontractors operating through their own limited companies. Directly employed PAYE construction workers pay standard income tax and NI through payroll — CIS does not apply to them.
UK coverage only. Last reviewed: 18 August 2026. Estimates use 2026/27 assumptions and are for planning, not legal or tax advice.
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