Employer Cost Calculator 2026/27
A salary is never the whole cost. Enter the salary to see the true cost of employing someone — employer National Insurance, pension, and the Employment Allowance.
- Rates: GOV.UK — checked 5 Nov 2026
- Tested against HMRC worked examples
- Your salary never leaves your browser
Most small employers can claim it. It is one claim per employer, not per employee. Public bodies and single-director companies generally cannot — untick the box if that is you.
The minimum is 3% of qualifying earnings (£6,240–£50,270). The figure updates if you pay more.
Total employer cost
— / year
- Per month
- —
- On top of salary
- —
- Cost vs salary
- —
| Gross salary | — |
|---|---|
| Employer National Insurance (15% above £5,000) | — |
| Employer pension | — |
| Employment Allowance | — |
| Total employer cost | — |
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Rates checked 5 November 2026.
Every figure checked against HMRC's own examples.
Your salary never leaves your browser.
Rates re-checked by hand after every Budget.
Rates: GOV.UK — last checked 5 November 2026 See the official rates
How this is calculated
True employer cost = gross salary + employer National Insurance (15% of pay above the £5,000 secondary threshold) + employer pension (3% of qualifying earnings, £6,240–£50,270, at the auto-enrolment minimum) − the Employment Allowance (£10,500 a year) where eligible. The allowance reduces the employer-NI bill only, and only up to that bill — it is one claim per employer. The employee's own deductions (income tax, employee NI, their pension share) are not part of the employer's cost. Rates on the 2026/27 rates page; the employee's side is on the take-home pay calculator.
Examples — the true cost at common salaries
Auto-enrolment minimum pension (3%), Employment Allowance applied where it bites.
| Salary | Employer NI | Employer pension | Cost before allowance | Cost after allowance |
|---|---|---|---|---|
| £25,000 | £3,000.00 | £562.80 | £28,562.80 | £25,562.80 |
| £35,000 | £4,500.00 | £862.80 | £40,362.80 | £35,862.80 |
| £50,000 | £6,750.00 | £1,312.80 | £58,062.80 | £51,312.80 |
| £75,000 | £10,500.00 | £1,320.90 | £86,820.90 | £76,320.90 |
At £25,000 the £10,500 allowance covers the whole £3,000 NI bill, so the cost after allowance is just salary plus pension. At £75,000 the NI bill is exactly £10,500, so the allowance wipes it out too — above £75,000, NI starts to bite again.
Questions
What does an employee on £35,000 actually cost an employer?
£40,362.80 a year before the Employment Allowance: the £35,000 salary, plus £4,500.00 employer National Insurance (15% of pay above £5,000), plus £862.80 employer pension (3% of qualifying earnings). With the £10,500 Employment Allowance, the NI bill is covered in full and the cost falls to £35,862.80.
What is the Employment Allowance?
A £10,500-a-year reduction in the employer National Insurance bill, claimable by most small employers through payroll software or HMRC. It is one claim per employer, not per employee — so it covers the whole NI bill on a first employee's salary up to £75,000, but it does not multiply with headcount. Some employers cannot claim it, including public bodies and companies where the only employee is a director.
What is the employer National Insurance rate for 2026/27?
15% on pay above the £5,000-a-year secondary threshold (£417 a month, £96 a week). There is no upper limit: employer NI keeps charging at 15% on the whole salary above £5,000, unlike employee NI, which drops to 2% above £50,270.
How much pension must an employer pay?
At least 3% of qualifying earnings (£6,240–£50,270) under auto-enrolment — £862.80 a year on a £35,000 salary. The employee pays at least 5%, for a total minimum of 8%. Many employers pay more; this calculator shows the legal minimum.
Does this include anything else — holiday, equipment, training?
No. This is the statutory payroll cost: salary, employer NI and the minimum employer pension. Real hiring costs run higher once you add holiday pay cover, equipment, training, payroll software, and employer's liability insurance. Those are business costs, not tax — they are outside this calculator's scope.
Related calculators
Take-home pay calculator · National Insurance calculator · Pay rise calculator · National Insurance, explained · What your job really costs your employer · 2026/27 rates