Retail sector
Cost of employing retail staff UK (2026/27)
Retail is the UK's largest private-sector employer, and the majority of retail staff are paid at or close to the National Living Wage. In 2026/27, a full-time retail assistant on NLW (£12.71/hour) earns approximately £24,785 per year. The employer's total cost — salary, employer NI (15% above £5,000) and minimum pension — is approximately £28,309 per year. For retailers employing large numbers of part-time workers, each individual employee has their own NI threshold assessment. The April 2025 threshold change (from £9,100 to £5,000) has added approximately £790 per full-time NLW employee per year in additional employer NI.
UK scope: England, Scotland, Wales and Northern Ireland employer payroll planning for the 2026/27 tax year.
Sample total cost
£28,309
£2,359 per month on £24,785 salary
Employer NI
£2,968
15% above £5,000 secondary threshold (2026/27)
Pension + overheads
£556
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
- Retail sales assistant (NLW full-time): ~£24,785/year salary, ~£28,309 total cost.
- Supervisor / team leader: £26,000–£32,000, total cost £30,300–£37,600.
- Store manager (small format): £28,000–£40,000, total cost £32,800–£46,300.
- Employer NI on NLW salary (£24,785): approximately £2,968/year.
- Minimum pension on NLW salary: approximately £556/year.
- April 2025 NI change adds ~£790/year per NLW full-time retail worker.
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
How much does a part-time retail worker cost an employer?
A part-time retail worker on 20 hours per week at NLW (£12.71/hr) earns approximately £12,699/year. Employer NI on that salary is approximately £1,155 (15% of £7,699 above the £5,000 threshold) and minimum pension is approximately £195. Total employer cost before overheads: approximately £14,049/year. The NI threshold (£5,000) applies in full, not pro-rated for part-time hours.
Do retailers have to pay pension on minimum wage staff?
Yes, if the employee is aged 22–66 and earns more than £10,000/year. For full-time NLW staff earning £24,785, auto-enrolment is mandatory. For part-time staff earning under £10,000, they can opt in but are not automatically enrolled — however if they opt in, the employer must still contribute at minimum 3% of qualifying earnings.
How does Employment Allowance help retail employers?
For small retailers with total employer NI below £10,500/year, Employment Allowance can eliminate the entire NI bill. A small shop with five full-time NLW staff generates approximately £14,105 in total employer NI per year, so Employment Allowance (£10,500) would reduce net NI payable to approximately £3,605 per year. Larger retail chains above the eligibility criteria cannot claim.
UK coverage only. Last reviewed: 18 August 2026. Estimates use 2026/27 assumptions and are for planning, not legal or tax advice.
Ready to run payroll for this hire? Sage Payroll handles RTI submissions, auto-enrolment and payslips — HMRC-recognised and built for UK small businesses. Try Sage Payroll →
Affiliate link — we may earn a commission if you sign up, at no extra cost to you.