Cost of Employing Part-Time Staff UK (2026/27) — Employer NI, Pension & On-Costs

Updated 2026/27 · 5 min read · EmployerCalculator Editorial

How part-time employee costs work

Part-time employees are subject to the same employer National Insurance and pension rules as full-time staff. The secondary threshold for employer NI is £5,000 per year — not pro-rated for part-time hours. That means a part-time employee earning £15,000 per year still attracts employer NI at 15% on earnings above £5,000, giving £1,500 per year in NI.

Pension auto-enrolment applies if the employee earns more than £10,000 per year in a single job and is aged between 22 and State Pension Age. If they earn between £6,240 and £10,000, they have the right to opt in but do not have to be automatically enrolled. Below £6,240, no pension duty applies. For a part-time worker on £12,000 per year, qualifying earnings are £12,000 − £6,240 = £5,760, and minimum employer pension is 3% of £5,760 = £172.80 per year.

This means part-time hires can have a higher percentage-above-salary cost than full-time hires, because the fixed NI threshold is not reduced. A full-time £50,000 salary costs about 16% above salary in NI and pension. A part-time £15,000 salary costs about 12% above salary in NI and pension — but a part-time £20,000 salary costs about 14% above, and that percentage rises toward the full-time equivalent as salary increases.

Part-time employer cost: worked examples for 2026/27

At a £12,000 part-time salary: employer NI is £1,050 per year (15% of £7,000), pension is £172.80 per year. Total employer cost = £13,222.80 per year or approximately £1,101 per month.

At a £16,000 part-time salary: employer NI is £1,650 per year, pension is £291.60 per year. Total cost = £17,941.60 per year. At £20,000: NI = £2,250, pension = £411.60. Total = £22,661.60. At £25,000: NI = £3,000, pension = £563. Total = £28,563.

Employment Allowance applies to part-time employees in the same way as full-time. If you are an eligible employer with employer NI below £10,500 per year across all your employees, the allowance fully offsets the liability. For small businesses with a few part-time workers, this is particularly valuable.

Auto-enrolment for part-time workers: what changes

The most important distinction for part-time workers and auto-enrolment is the £10,000 earnings threshold. Workers earning below £10,000 per year from you are not automatically enrolled — but they have the right to opt in. If they opt in, you must make the minimum employer contribution.

The qualifying earnings band (£6,240–£50,270) is also fixed — not pro-rated. So for a worker earning £8,000 per year, qualifying earnings are £8,000 − £6,240 = £1,760, and minimum employer pension is just 3% of £1,760 = £52.80 per year. Low-earning part-time workers carry a very low pension cost.

If a worker has more than one part-time job, each employer assesses auto-enrolment duties separately based on their own salary payment only — not the employee's total earnings from all jobs. Make sure you assess eligibility accurately at the start of employment and re-assess at the annual re-enrolment date.

Stop doing this by hand — Sage Payroll works out employer NI, pension auto-enrolment, statutory sick and maternity pay and files RTI to HMRC automatically for UK employers. Try Sage Payroll →

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Frequently asked questions

How much does it cost to employ someone in the UK?

The true cost to employ someone in the UK is typically 15–20% above gross salary. At £30,000: employer NI £3,750 + pension £713 = approximately £34,463 per year. At £50,000: employer NI £6,750 + pension £1,313 = approximately £58,063 per year. Adding workplace overheads of £2,000–£5,000 can bring the total to 20–25% above the headline salary.

What is the employer NI rate for 2026/27?

For 2026/27, employer Class 1 National Insurance is charged at 15% on employee earnings above the secondary threshold of £5,000 per year (£96 per week, £416 per month). This rate increased from 13.8% in April 2025, when the threshold was simultaneously cut from £9,100 to £5,000. Both changes apply from 6 April 2025.

How much employer NI do I pay on a £35,000 salary?

At £35,000 salary, employer NI for 2026/27 is £4,500 per year — 15% on £30,000 of earnings above the £5,000 threshold. That is £375 per month. In 2024/25, the same salary produced £3,585 in employer NI. The April 2025 changes therefore add £915 per year on this salary alone.

What is Employment Allowance and who can claim it?

Employment Allowance lets eligible employers reduce their annual employer NI bill by up to £10,500 in 2026/27, increased from £5,000 in 2024/25. The previous £100,000 NI bill eligibility cap has been removed, so more businesses qualify. Companies where the only paid employee is also a director cannot claim. Apply through payroll software via the Employer Payment Summary indicator.

What is the total employer cost above salary?

Beyond salary, employer cost includes: employer NI (15% on earnings above £5,000), employer pension (minimum 3% of qualifying earnings between £6,240 and £50,270), and overheads such as equipment, software and workspace. For most UK salaries this adds 12–20% above headline pay. Use the inputs above to set your exact pension rate and overhead figure.

What changed for employers in April 2025?

Three changes took effect from 6 April 2025: the employer NI rate rose from 13.8% to 15%, the secondary threshold was cut from £9,100 to £5,000, and Employment Allowance increased from £5,000 to £10,500 with the eligibility cap removed. For a £30,000 salary, annual employer NI increased from approximately £2,884 to £3,750 — a rise of £866 per year.

How is employer NI different from employee NI?

Employer NI is a cost paid by the employer on top of gross salary — it does not reduce take-home pay. Employee NI is deducted from the employee's wages instead. For 2026/27, employees pay 8% on earnings between £12,570 and £50,270, then 2% above that. Employers pay 15% on all earnings above £5,000 with no upper cap. This calculator covers the employer side; for employee take-home pay see AfterTaxSalary.co.uk.

What are employer costs in the UK?

UK employer costs in 2026/27 are: gross salary, employer NI at 15% on earnings above £5,000, employer pension at minimum 3% of qualifying earnings (£6,240–£50,270), and any operational overheads such as equipment or software. For a £35,000 salary, statutory employer costs (NI + pension) add approximately £5,363/year before overheads.

How much do I cost my employer in the UK?

If you earn £35,000, you cost your employer roughly £40,363/year — your salary plus £4,500 employer NI and £863 minimum pension. At £50,000, the total is approximately £58,063. Your employer pays these on top of your salary; they are not deducted from your pay. Use this calculator to see the exact figure for your salary.

Is this a PAYE cost calculator for employers?

Yes. PAYE employer costs include employer NI — calculated at 15% above £5,000 for 2026/27 — plus the employer's auto-enrolment pension contribution. The full calculator models both alongside any overhead assumptions to give a total PAYE-basis employer spend per employee.

What is a cost to company (CTC) salary in the UK?

Cost to company (CTC) in the UK refers to the total annual cost of an employee to their employer — salary, employer NI, pension, and overheads combined. A £35,000 CTC salary typically means a gross salary of roughly £30,000–£32,000 once the employer's NI and pension obligations are included in the total. Use this calculator to work backwards from a CTC budget to a gross salary.

Tools worth considering

UK payroll and HR tools. Editorial summary only — not endorsements.

Xero Payroll

Cloud payroll bundled with Xero accounting. Handles RTI submissions, auto-enrolment and payslip generation. Commonly used by UK small businesses already on Xero for bookkeeping.

See Xero Payroll →

QuickBooks Payroll

Payroll add-on for QuickBooks. Used by UK small employers for PAYE, NI, pension and HMRC RTI. Integrates with QuickBooks accounting.

See QuickBooks Payroll →

Sage Payroll

Long-established UK payroll software with HMRC recognition. Works standalone (without Sage accounting) and is widely used in small businesses and accountancy practices.

See Sage Payroll →

Employment Hero

HR and payroll platform used by growing UK teams. Combines contracts, onboarding, leave management and payroll in one system. HMRC RTI integrated.

See Employment Hero →