Employer cost — London

Employer Cost Calculator — London (2026/27)

Calculate the full cost of employing someone in London for 2026/27. Based on the average London salary of £45,000/year. Employer NI at 15%, minimum auto-enrolment pension and a £2,500 overhead estimate bring the total to approximately £54,662 per employee.

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

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

Sample total cost

£54,663

£4,555 per month on £45,000 salary

Employer NI

£6,000

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

Pension + overheads

£3,663

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

Use the live tools

Calculate exact cost — London Cost by salary level 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 is the employer NI cost for a London employee?
At the average London salary of £45,000, employer NI for 2026/27 is approximately £6,000/year — 15% of earnings above the £5,000 secondary threshold. Adding minimum pension of £1,162 and typical overheads of £2,500, total employer cost is approximately £54,662/year.
Is employer NI different in London compared to the rest of the UK?
No. Employer National Insurance is a UK-wide tax. The rate (15%) and the secondary threshold (£5,000/year) are identical for all employers in England, and across the whole of the UK. Only the salary level affects the total NI bill — so London employers pay more NI per head only if their average salary is higher than the national average.
What is the minimum wage cost for a London employer in 2026/27?
The National Living Wage for workers aged 21 and over is £12.21/hr for 2026/27. At 37.5 hours per week, annual salary is approximately £23,810. Employer NI on £23,810 is approximately £2,822 and pension approximately £527 — total employer cost at NLW is approximately £27,159/year before overheads. The London Living Wage (£13.85/hr, set by the Living Wage Foundation) is voluntarily adopted by accredited London employers — above the statutory NLW of £12.21/hr. At £13.85/hr for a 37.5-hour week, annual salary is approximately £27,008.
What does Employment Allowance mean for my NI bill?
Eligible employers can claim up to £10,500 of Employment Allowance per year to offset their employer NI bill in 2026/27. Most limited companies with at least one employee who is not the sole director qualify. For a small London employer with a £45,000 salary, Employment Allowance could eliminate all employer NI in the year.
How much does it cost to employ someone at £25,000 in London?
At £25,000 salary: employer NI = £3,000, pension = £562. Total statutory employer cost: approximately £28,562/year. At £50,000: employer NI = £6,750, pension = £1,312, total = approximately £58,062/year.

UK coverage only. Last reviewed: 15 June 2026. Estimates use 2026/27 assumptions and are for planning, not legal or tax advice.