2026/27 tax year
What does an employee really cost?
Salary is only part of it. Add employer National Insurance at 15%, auto-enrolment pension and the apprenticeship levy, and a £35,000 hire costs around £40,363 a year. Enter a salary to see the full figure, itemised.
Behind the numbers
- Employer Class 1 National Insurance at 15% on earnings above the £5,000 secondary threshold, the 2026/27 rate, unchanged from 2025/26 (gov.uk).
- Pension is the auto-enrolment employer contribution; qualifying earnings band £6,240–£50,270 (gov.uk). Many employers contribute on full salary instead, use the toggle.
- Apprenticeship levy is 0.5% of the pay bill for employers whose annual pay bill exceeds £3m; the £15,000 annual allowance is not apportioned to a single employee here (gov.uk).
- The Employment Allowance (up to £10,500 off employer NI for eligible employers) is not deducted, because it applies once per employer, not per employee (gov.uk).
- No employer NI is due on employees under 21 or apprentices under 25 earning below the upper secondary threshold; standard category A letter assumed.
Employer Cost Calculator is an independent information site operated by Ellul Solutions Ltd. It is not affiliated with HMRC or any government body, and nothing here is tax, accounting or legal advice, confirm figures with your accountant or payroll provider before budgeting.
UK true employer cost table, 2026/27
Last updated
Salary, employer NI at 15% above £5,000, and the 3% minimum auto-enrolment pension on qualifying earnings, the three unavoidable lines of an employment cost. Levy and benefits excluded.
Computed from published HMRC/DWP 2026/27 rates: employer NI 15% above £5,000; pension 3% of £6,240–£50,270 qualifying earnings.
| Gross salary | Employer NI (15%) | Pension (3% min) | True annual cost | On-cost |
|---|---|---|---|---|
| £25,000 | £3,000 | £563 | £28,563 | 14.3% |
| £30,000 | £3,750 | £713 | £34,463 | 14.9% |
| £35,000 | £4,500 | £863 | £40,363 | 15.3% |
| £40,000 | £5,250 | £1,013 | £46,263 | 15.7% |
| £50,000 | £6,750 | £1,313 | £58,063 | 16.1% |
| £60,000 | £8,250 | £1,321 | £69,571 | 16.0% |
| £80,000 | £11,250 | £1,321 | £92,571 | 15.7% |
- Employing someone on £35,000 costs a UK employer about £40,363 a year in 2026/27, a 15.3% on-cost before benefits or overheads.
- Employer National Insurance is 15% of everything above £5,000 a year in 2026/27, £4,500 on a £35,000 salary.
- The minimum employer pension contribution is 3% of qualifying earnings (£6,240–£50,270), so it caps at about £1,321 a year however high the salary.
Cite this page
“UK true employer cost table, 2026/27”, Employer Cost Calculator, https://employercostcalculator.co.uk/ (updated 2026-08-14). Computed from published HMRC/DWP 2026/27 rates: employer NI 15% above £5,000; pension 3% of £6,240–£50,270 qualifying earnings.
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Read next
The longer answers, with sources.
- Employer National Insurance in 2026/27: rate, threshold, examples
The 2026/27 employer NI rate is 15% above the £5,000 secondary threshold. What that means per salary, who is exempt, and how the Employment Allowance works.
- The true cost of an employee in the UK (2026/27)
Beyond salary: employer NI, pension, levy, holiday cover, equipment and overheads, what a hire actually costs a UK employer in 2026/27, with a worked £35,000 example.
The questions we get
How much does an employee on £35,000 cost in 2026/27?
About £40,363 a year: £35,000 salary, £4,500 employer National Insurance (15% above £5,000), and £863 minimum pension (3% of qualifying earnings). Benefits, equipment and overheads come on top.
What percentage should I add to salary for employer costs?
For 2026/27, statutory on-costs are 14–16% of salary for most pay levels (employer NI plus minimum pension). Budget 20–25% once equipment, insurance and overheads are included.
Is employer National Insurance really 15%?
Yes, 15% on all earnings above £5,000 a year since April 2025, unchanged for 2026/27. There is no upper cap for employers.
Does the calculator include the Employment Allowance?
No, deliberately. The allowance (up to £10,500) applies once per employer against the whole NI bill, not per employee, so a per-hire calculator that deducted it would understate every hire after the first.
Does salary sacrifice reduce employer costs?
Yes. Salary exchanged for employer pension contributions escapes both employee and employer NI, saving the employer 15% of the sacrificed amount.
Hiring? Know the full number first.
Salary, NI, pension and levy, itemised in ten seconds.
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