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Employer Cost Calculator UK 2026/27

The true cost of hiring — salary, employer NI, and pension contributions combined

✓ Updated 2026/27✓ No signup✓ No data stored✓ Runs in your browser
£
%
£
TOTAL ANNUAL COST
£0
to employ this person
Gross Salary
£0
Employer NI
£0
Pension Contribution
£0
% Above Salary
0%

Worked example

An employer offers a £35,000 salary with 3% pension contribution and no other benefits:

Gross salary£35,000.00
Employer NI (15% above £5,000 threshold)+£4,500.00
Employer pension (3% of salary)+£1,050.00
Less Employment Allowance (if eligible)−£4,500.00
Total annual cost to employer£31,050.00 (approx, with EA applied)
% above the £35,000 salary figure~11-16% depending on Employment Allowance

How the calculation works

  1. Start with gross salary — the amount stated in the employment contract
  2. Add employer NI — 15% on earnings above the £5,000 secondary threshold
  3. Add pension contribution — auto-enrolment requires a minimum 3% employer contribution on qualifying earnings
  4. Subtract Employment Allowance — if eligible, up to £10,500/yr is deducted from your total employer NI bill across all staff
  5. Add other costs — benefits, equipment, training, or other per-employee costs you choose to include

As a rule of thumb, budget for 12–20% above gross salary as the true cost of employing someone in the UK, depending on pension contributions, benefits, and whether Employment Allowance applies.

Frequently asked questions

What does it really cost to employ someone in the UK? ▼

Beyond gross salary, employers typically pay an additional 12–20%, covering employer National Insurance (15% above £5,000), minimum 3% pension auto-enrolment, and any other benefits offered.

Is employer NI the same as employee NI? ▼

No. Employee NI is deducted from the employee's pay. Employer NI is a separate cost paid entirely by the employer on top of the salary — it does not affect the employee's take-home pay.

Do all employers have to pay pension contributions? ▼

Yes, under auto-enrolment, employers must contribute a minimum of 3% of qualifying earnings to an eligible employee's workplace pension, unless the employee opts out.

Can Employment Allowance reduce my costs to zero? ▼

For a single low-to-mid salary employee, Employment Allowance (up to £10,500/yr) can significantly reduce or even eliminate your employer NI bill. It applies across your whole payroll, not per employee, so the benefit shrinks as you hire more staff.

📄 HMRC sources

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🔒 Privacy & disclaimer

All calculations run entirely in your browser. No data is sent to our servers, stored, or shared with any third party.

Results are estimates based on 2026/27 HMRC rates and are intended as a guide only. They do not constitute financial or tax advice. Always verify with HMRC or a qualified accountant for your specific circumstances.