UK employee cost calculator: what a hire really costs an employer
Salary is only the start. Add employer National Insurance and the minimum workplace pension to see the yearly and monthly cost, for one person or the whole team. Figures for the 2025 to 2026 tax year, taken from gov.uk.
Estimated employer cost, 2025 to 2026
- Employer National Insurance, per employee£3,000
- Minimum employer pension, per employee£563
- Yearly cost of one employee£28,563
- Monthly cost of one employee£2,380
- Team total per year£28,563
Estimate. Employer National Insurance at 15% above £5,000 a year and the 3% minimum pension on qualifying earnings between £6,240 and £50,270, both from gov.uk for the 2025 to 2026 tax year. Benefits, insurance and the apprenticeship levy are not included.
How the calculation works
- Employer National Insurance: 15% of annual earnings above the secondary threshold of £5,000 (£96 a week, £417 a month).
- Workplace pension: the minimum employer contribution under automatic enrolment is 3% of qualifying earnings, the band between £6,240 and £50,270 a year. Your scheme may use a different definition of pay or a higher rate.
- Employment Allowance: eligible employers reduce their annual employer National Insurance bill by up to £10,500. It is one allowance per business, so the calculator takes it off the team total, not off each person.
- Not included: the apprenticeship levy (0.5% of the pay bill, with a £15,000 allowance that cancels it below a £3 million pay bill), private benefits, insurance and training. Holiday pay is part of the salary you enter, not an extra.
- Figures are for the 2025 to 2026 tax year, taken from gov.uk on 4 September 2026. Check them at the start of each tax year.
Worked examples: employer cost by salary, 2025 to 2026
One employee, before Employment Allowance, rounded to the pound. Monthly is the yearly figure divided by twelve.
| Salary | Employer NI | Pension (3%) | Cost per year | Cost per month |
|---|---|---|---|---|
| £22,000 | £2,550 | £473 | £25,023 | £2,085 |
| £25,000 | £3,000 | £563 | £28,563 | £2,380 |
| £30,000 | £3,750 | £713 | £34,463 | £2,872 |
| £35,000 | £4,500 | £863 | £40,363 | £3,364 |
| £40,000 | £5,250 | £1,013 | £46,263 | £3,855 |
| £50,000 | £6,750 | £1,313 | £58,063 | £4,839 |
Frequently asked questions
- How much does an employee cost on top of their salary in the UK?
- For the 2025 to 2026 tax year, employer National Insurance is 15% of earnings above £5,000 a year, and the minimum employer pension contribution under automatic enrolment is 3% of qualifying earnings between £6,240 and £50,270. On a £25,000 salary that is £3,000 of National Insurance and about £563 of pension, so roughly £28,563 a year before any allowance.
- What is the employer National Insurance rate for 2025 to 2026?
- 15% on earnings above the secondary threshold of £5,000 a year (£96 a week, £417 a month), according to the gov.uk rates and thresholds for employers.
- What is the Employment Allowance?
- Eligible employers can reduce their annual employer National Insurance bill by up to £10,500. It applies to the business as a whole, not per employee, which is why this calculator deducts it from the team total. Check the eligibility rules on gov.uk.
- Is the employer pension contribution based on the full salary?
- No. The 3% minimum employer contribution applies to qualifying earnings, the band between £6,240 and £50,270 a year, unless the pension scheme uses a different definition of pay.
Hiring in the United States? See the US employee cost calculator. Building the rota as well? Read UK rest breaks and your schedule.
Sources: gov.uk, Rates and thresholds for employers 2025 to 2026; gov.uk, Workplace pensions; gov.uk, Claim Employment Allowance. General information, not accounting advice.