£40/hr

Employer cost at £40 per hour (2026/27)

An employee paid £40.00 per hour, working full-time (37.5 hours per week), earns approximately £78,000 per year. The true employer cost is higher: employer NI at 15% on earnings above the £5,000 secondary threshold adds £10,950 per year, and minimum auto-enrolment pension at 3% adds £1,320 per year on qualifying earnings. Total employer cost: approximately £90,270 per year, or roughly £46.29 per productive hour before overheads.

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UK scope: England, Scotland, Wales and Northern Ireland employer payroll planning for the 2026/27 tax year.

Calculate exact employer cost Full employer cost calculator Cost by salary Employer NI by salary

Sample total cost

£90,271

£7,523 per month on £78,000 salary

Employer NI

£10,950

15% above £5,000 secondary threshold (2026/27)

Pension + overheads

£1,321

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 → £34,463/yr · £35k → £40,363/yr · £50k → £58,063/yr

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What this page helps you check

  • Hourly rate: £40.00/hour.
  • Full-time annual salary (37.5 hrs/wk): approximately £78,000/year.
  • Employer NI (15% above £5,000): approximately £10,950/year.
  • Minimum employer pension (3% on qualifying earnings): approximately £1,320/year.
  • Total statutory employer cost full-time: approximately £90,270/year.
  • At 20 hrs/week: salary ≈ £41,600 · total employer cost ≈ £48,150/year.
  • At 37.5 hrs/week (full-time): salary ≈ £78,000 · total employer cost ≈ £90,270/year.
  • At 40 hrs/week: salary ≈ £83,200 · total employer cost ≈ £96,250/year.

Use the live tools

Calculate exact employer cost Cost of employing by salary Cost of employing by salary Employer NI by salary Auto-enrolment pension calculator

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.

Official UK references

HMRC rates and thresholds Employment Allowance Pensions Regulator guidance Our methodology Our source list

Frequently asked questions

What does a £40.00/hour employee cost an employer per year?
A full-time employee at £40.00/hour (37.5 hours per week) earns approximately £78,000 per year. Adding employer NI of approximately £10,950 and minimum pension of approximately £1,320, the total employer cost before overheads is approximately £90,270 per year.
Does the employer NI rate change for lower-paid workers?
No. Employer NI is always 15% on earnings above the £5,000 secondary threshold for 2026/27. There is no reduced rate for lower-paid workers. The practical effect is that lower wages carry a higher NI burden as a percentage of salary, because a larger proportion of total earnings falls in the NIable band relative to the threshold.
How does hourly employer cost differ from hourly wage?
The hourly wage is what the employee receives. The true employer hourly cost includes the wage plus the employer's share of NI and pension contributions. For a £15/hour worker on full-time hours, the true employer cost per hour is approximately £17.00–£17.50 depending on pension rate and overheads.

UK coverage only. Rates last checked: 14 October 2026. Estimates use 2026/27 assumptions and are for planning, not legal or tax advice.

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Written and reviewed by the EmployerCalculator team.

Every figure is checked against current HMRC and GOV.UK guidance and reviewed for the 2026/27 tax year. The calculators were last checked on (how we check). We explain the numbers in plain English with worked examples. Editorial standards · About us