Employer true-cost calculator
A salary is only part of what an employee costs. Add employer National Insurance, the workplace pension and setup costs and the real figure is meaningfully higher. This estimates the full 2026/27 cost of a hire.
What is in the number
The true cost is built from the salary plus the things that come with it. For 2026/27 the main on-costs are employer National Insurance at 15% on earnings above the £5,000 secondary threshold, and the workplace pension (minimum 3% on qualifying earnings between £6,240 and £50,270). On top of those come one-off and running costs: equipment, software, training and recruitment.
The Employment Allowance can reduce a small employer's National Insurance bill by up to £10,500 a year. It is a single yearly amount for your whole payroll, not per employee, so tick the box only if this hire's NI is genuinely covered by your remaining allowance.
How to use the result
Use the ongoing annual figure for budgeting and the first-year figure for cashflow planning, since recruitment and equipment land up front. As a rule of thumb, the real cost of a hire is comfortably above the advertised salary once NI and pension are in, before you add anything else.
Employer NI (15% above the £5,000 secondary threshold), the £10,500 Employment Allowance, and the auto-enrolment pension minimums (3% on qualifying earnings of £6,240-£50,270) were verified June 2026 for the 2026/27 tax year from GOV.UK. Rates change each April - check current figures. This is a simplified estimate: it excludes the Apprenticeship Levy, statutory sick/maternity pay, holiday cover, benefits in kind and other employer costs, and it is not tax or payroll advice.