True cost

True cost of an employee calculator (UK, 2025/26)

The true cost of an employee is always higher than the salary on the offer letter. For 2025/26 UK employers must pay employer NI at 15% on earnings above £5,000, a minimum 3% pension under auto-enrolment, and carry any per-employee overhead costs on top. The calculator below gives the true total for any salary — annual and monthly — with Employment Allowance modelling for eligible employers.

UK scope: England, Scotland, Wales and Northern Ireland employer payroll planning for the 2025/26 tax year.

Sample total cost

£43,363

£3,614 per month on £35,000 salary

Employer NI

£4,500

15% above £5,000 secondary threshold (2025/26)

Pension + overheads

£3,863

Baseline employer pension plus configured overheads

Key assumptions — UK 2025/26

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

£25,000 salary → ~£28,563/year true cost (employer NI + pension).
£35,000 salary → ~£40,363/year true cost (with £3,000 overhead assumption).
£50,000 salary → ~£58,063/year true cost (with £3,000 overhead assumption).
£75,000 salary → ~£86,813/year true cost (with £3,000 overhead assumption).
Employment Allowance (up to £10,500) reduces NI for eligible employers.

Use the live tools

Calculate true cost of your employee 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 2025/26.

Auto-enrolment pension

Minimum employer contribution 3% on qualifying earnings.

Employment Allowance

Up to £10,500 relief in 2025/26 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 true cost of an employee in the UK?

In 2025/26, the true minimum cost is gross salary plus employer NI (15% above £5,000) plus employer pension (3% of qualifying earnings). A £35,000 salary costs approximately £40,363/year before additional overheads.

How much does a £30,000 employee really cost?

A £30,000 salary costs approximately £34,464/year including employer NI of ~£3,750 and pension of ~£714. With typical overhead assumptions (equipment, software, workspace) the figure rises to approximately £37,464.

What overheads should I include in employee cost?

Common overhead inclusions: desk/workspace cost (£1,500–£3,000/year), IT equipment and software licences (£500–£1,500/year), recruitment amortisation, and training budget. The calculator allows a custom overhead figure.

How does Employment Allowance affect the true cost?

Eligible employers can offset up to £10,500 of employer NI per year with Employment Allowance. For a small team this can significantly reduce per-employee cost — especially for lower salary ranges where NI is a larger proportion of total cost.

UK coverage only. Last reviewed: 05 April 2026. Estimates use 2025/26 assumptions and are for planning, not legal or tax advice.