Employing someone on a £62,000 salary costs £71,871 per year (£5,989 per month) once you add employer NI at 15% and minimum auto-enrolment pension. That is £9,871 above the headline salary — a 15.9% uplift employers need to budget for before the first payslip.
£5,989 per month total employer cost.
£712 per month employer NI (£8,550 per year).
£9,871 per year above salary (15.9%).
| Item | Annual | Monthly |
|---|---|---|
| Salary | £62,000 | £5,167 |
| Employer NI (15% above £5,000) | £8,550 | £712 |
| Employer pension (3% minimum) | £1,321 | £110 |
| Total employer cost | £71,871 | £5,989 |
Employer NI for 2025/26 is charged at 15% on earnings above the £5,000 secondary threshold. The first £5,000 of salary is exempt.
| Earnings band | Rate | NI due |
|---|---|---|
| Up to £5,000 | 0% | £0 |
| £5,001 to £62,000 | 15% | £8,550 |
| Total NI (2025/26) | £8,550 |
Employment Allowance reduces the annual employer NI bill by up to £10,500 for eligible businesses and charities. Solo-director companies are excluded.
Without allowance: £8,550 employer NI per year.
With full £10,500 allowance applied: £0 NI due after offset.
From 6 April 2025, employer NI increased from 13.8% to 15% and the secondary threshold fell from £9,100 to £5,000. Both changes increase cost simultaneously — a higher rate applied to a wider NIable base.
2024/25 NI on this salary: £7,300 (13.8% above £9,100).
2025/26 NI on this salary: £8,550 (15% above £5,000).
Increase: £1,250 (17.1% more than 2024/25).
Employer costs go well beyond the salary figure on the job advert. For a £62,000 hire, the true cost to your business is £71,871 per year — before you factor in any overheads such as equipment, software licences or workspace costs. The gap between the two figures (£9,871) is the amount that often catches small employers off-guard when preparing a hiring budget.
The two compulsory on-costs are employer National Insurance and auto-enrolment pension. Employer NI is set at 15% on all earnings above the £5,000 secondary threshold from April 2025 — higher than the previous 13.8% rate — and you cannot avoid it unless the role qualifies for a reduced rate (under-21s, apprentices under 25). Pension is the employer's minimum 3% contribution on qualifying earnings between £6,240 and £50,270; you can offer more, but 3% is the legal floor for most workers.
Employment Allowance can offset up to £10,500 of your annual employer NI bill if you are eligible. Most businesses with multiple employees can claim it — but single-director companies with no other employees cannot. If you qualify, your actual NI cost after the allowance is £0 per year, which brings the total employer cost down significantly at lower salary levels.
A few practical things to work through before your first payroll run:
The figures on this page use 3% employer pension and no Employment Allowance. Use the full calculator to model your real scenario.
Once you know the total employer cost, the next step is payroll software that handles RTI submissions, auto-enrolment and payslips automatically. UK employers typically use Xero, QuickBooks, Sage or FreeAgent.
Tax year 2025/26. Employer NI calculated at 15% on earnings above the £5,000 secondary threshold per HMRC rates and thresholds guidance. Auto-enrolment pension at employer minimum 3% on qualifying earnings between £6,240 and £50,270 per The Pensions Regulator guidance. Employment Allowance eligibility must be confirmed with HMRC or your accountant — this page shows both with and without scenarios. Overhead costs are excluded from this page — use the full calculator to include them.
Estimates only — not financial or legal advice. Sources: HMRC · The Pensions Regulator