Cost of Employing Someone
What an employee really costs in 2026/27: salary, employer National Insurance at 15% and the minimum workplace pension, with the Employment Allowance.
Rates checked against GOV.UK on 19 October 2026 · How we check our calculators
The role
Cost in 2026/27
- Salary
- £30,000.00
- Employer NI (15% above £5,000)
- £3,750.00
- Employer pension (3% of £23,760.00)
- £712.80
- Cost per employee
- £34,462.80
Total for 1 employee
£30,713
14.88% on top of salary before the allowance; Employment Allowance saves £3,750
What an employee costs at common salaries, 2026/27
One employee aged 21 or over, the 3% minimum employer pension, before the Employment Allowance. Free to quote with a link to this page.
| Salary | Employer NI | Employer pension | Total cost | On top of salary |
|---|---|---|---|---|
| £26,436.80National Living Wage, 40 hours a week | £3,215.52 | £605.90 | £30,258.22 | 14.45% |
| £30,000 | £3,750.00 | £712.80 | £34,462.80 | 14.88% |
| £35,000 | £4,500.00 | £862.80 | £40,362.80 | 15.32% |
| £40,000 | £5,250.00 | £1,012.80 | £46,262.80 | 15.66% |
| £50,000 | £6,750.00 | £1,312.80 | £58,062.80 | 16.13% |
| £60,000 | £8,250.00 | £1,320.90 | £69,570.90 | 15.95% |
| £80,000 | £11,250.00 | £1,320.90 | £92,570.90 | 15.71% |
| £100,000 | £14,250.00 | £1,320.90 | £115,570.90 | 15.57% |
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Important Disclaimer
This tool provides indicative calculations only and does not constitute financial, accounting, tax, or legal advice. The accuracy of results depends on the accuracy of information you provide. Consult a qualified professional for complex situations.
Overview
An employee costs more than their salary. In 2026/27 the employer pays National Insurance at 15% on everything above £5,000 a year, and must pay at least 3% of qualifying earnings into a workplace pension for anyone auto-enrolled (earning £10,000 or more). Qualifying earnings are the slice of pay between £6,240 and £50,270. Most small employers can then take up to £10,500 a year off their total employer NI with the Employment Allowance. This calculator adds those legal minimums together for one employee or a team.
Worked Example (2026/27)
Worked Example: Hiring on £30,000
One employee, 21 or over: - Salary: £30,000 - Employer NI: 15% × (£30,000 − £5,000) = £3,750 - Employer pension: 3% × (£30,000 − £6,240) = £712.80 - Total cost: £34,462.80, which is 14.88% on top of salary
A team of four on the same salary, claiming the Employment Allowance: - Employer NI: 4 × £3,750 = £15,000, less the £10,500 allowance = £4,500 - Total cost: 4 × £34,462.80 − £10,500 = £127,351.20
For the first few hires the allowance cancels most of the employer NI. It's a fixed £10,500 a year, so it matters less as the team grows.
2026/27 Rates & Thresholds
| 2026/27 | Amount |
|---|---|
| Employer NI rate | 15% |
| Secondary threshold (employer NI starts) | £5,000 a year |
| Employment Allowance | up to £10,500 a year |
| Auto-enrolment trigger | £10,000 a year |
| Qualifying earnings band (pension) | £6,240 to £50,270 |
| Minimum employer pension | 3% of qualifying earnings |
| National Living Wage (21+) | £12.71 an hour |
What This Doesn't Include
The calculator covers the costs set by law on every salary. Other costs come on top:
- Holiday pay is part of the salary, but cover for someone on leave isn't.
- Statutory Sick Pay is payable from the first day of sickness from April 2026.
- Employer's liability insurance is compulsory for most employers.
- The Apprenticeship Levy (0.5%) only applies once the annual pay bill is over £3 million.
- Recruitment, equipment, software and training.
Hiring Under-21s and Apprentices
For employees under 21, apprentices under 25 and veterans in their first year of civilian work, employer NI is 0% on earnings up to £50,270. On a £30,000 salary that saves the full £3,750. The pension duty still applies. Use the relief option in the calculator, and see the employer NI calculator for weekly and monthly pay.
Common Mistakes HMRC Penalises
- Working out pension on the whole salary. The legal minimum is 3% of qualifying earnings between £6,240 and £50,270, not of total pay. Your scheme may use a different basis.
- Using last year's employer NI figures. The rate rose to 15% and the threshold fell to £5,000 from April 2025.
- Expecting the Employment Allowance to cover a whole team. It's £10,500 a year in total, not per employee.
- Claiming the Employment Allowance for a company whose only employee is a sole director.
- Leaving out someone earning under £10,000 who opts in to the pension. If they earn over £6,240, the employer must contribute.
When to Seek Professional Advice
Get payroll or accounting advice if you're hiring someone on variable hours or commission, using salary sacrifice for pensions, connected to other companies (they share one Employment Allowance), or running payroll for the first time. The minimums here are reliable; your scheme rules and contracts can change the real figure.
Frequently Asked Questions
How much does it cost to employ someone on £30,000 in 2026/27?+
About £34,463 a year at the legal minimum: the £30,000 salary, £3,750 of employer National Insurance (15% above £5,000) and £712.80 of employer pension (3% of earnings between £6,240 and £50,270). The Employment Allowance can reduce the National Insurance if the business is eligible.
What is employer National Insurance in 2026/27?+
15% on an employee's earnings above the secondary threshold of £5,000 a year (£96 a week, £417 a month). For employees under 21, apprentices under 25 and veterans in their first civilian year, it's 0% up to £50,270.
Do I have to pay into my employee's pension?+
Yes, if they're auto-enrolled. That means aged 22 to State Pension age and earning £10,000 or more. The employer must pay at least 3% of qualifying earnings, the band between £6,240 and £50,270, with a total minimum of 8% including the employee's share.
What is the Employment Allowance?+
A reduction of up to £10,500 a year in an employer's Class 1 National Insurance bill, claimed through payroll. Most employers can claim it. A company whose only employee is a sole director can't, and connected companies share one allowance.
Is holiday pay an extra cost on top of salary?+
No. Holiday pay is part of the annual salary, because the employee is paid as normal while on leave. The extra cost is any cover you arrange while they're away.
Sources and how this calculator is checked
The rates and thresholds in this calculator come from the GOV.UK pages below. We last checked them on 19 October 2026. The calculation engine is covered by 400+ automated tests, whose expected figures come from GOV.UK worked examples and PolicyEngine UK, an open-source model of the UK tax system. Read our methodology.
- Rates and thresholds for employers 2026 to 2027 (gov.uk)
- Workplace pensions: what you, your employer and the government pay (gov.uk)
- Employment Allowance: what you can claim (gov.uk)
Spotted a figure that doesn't match GOV.UK? Tell us and we'll correct it.
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