Employer NI & cost-to-hire calculator
Hiring is rarely as cheap as the offer letter implies. Add a salary in, get the full employer NI at 15%, the Employment Allowance offset of up to £10,500, and the 3% auto-enrolment pension contribution stacked on top, so you can see what an extra head actually costs each month.
Your team
Total annual employment cost
£71,726
That is £5,977 per month across the team.
The cost breakdown
- Gross salaries
- £70,000
- Employer NI (gross)
- £9,000
- Less Employment Allowance
- -£9,000
- Employer NI (net)
- £0
- Pension (minimum 3% employer)
- £1,726
- Total employment cost
- £71,726
Does not include employee benefits, software per seat, equipment, training, or recruitment fees. Real all-in cost per hire typically adds 10-20% on top of the figures above.
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How this works
Add each role on your payroll with its gross salary. The calculator works out employer NI per employee at 15% above the £5,000 secondary threshold, applies the £10,500 Employment Allowance once across the team if you qualify, and optionally adds the minimum 3% employer pension contribution on qualifying earnings. The total annual employment cost is shown at the top.
The figures are statutory floors. Real all-in cost per hire is typically 10-20% higher once you factor in software, equipment, training, recruitment and any bonus or commission structure.
Worked example: an employee on a £40,000 salary generates employer NI of £5,250 (15% on the £35,000 above the £5,000 secondary threshold) plus minimum auto-enrolment pension of £1,013 (3% on qualifying earnings between £6,240 and £40,000). The total annual employment cost is £46,263, or £3,855 per month. If the employer has at least one other employee and qualifies for the Employment Allowance, up to £10,500 of that £5,250 NI bill can be offset, reducing the NI cost to nil and the monthly employment cost to £3,418.
Frequently asked questions
- How is employer National Insurance calculated for 2026/27?
- Employer NI (Class 1 secondary) is 15% on earnings above the secondary threshold of £5,000 per year per employee for 2026/27 (the rate increased from 13.8% and the threshold reduced from £9,100 in the Autumn Budget 2024, and both figures are unchanged for 2026/27). So an employee on £40,000 generates (£40,000 - £5,000) × 15% = £5,250 of employer NI before any Employment Allowance is applied.
- What is the Employment Allowance and do I qualify?
- Employment Allowance lets eligible UK employers reduce their employer NI bill by up to £10,500 per tax year in 2026/27 (unchanged from 2025/26; it rose from £5,000 in 2024/25). Most small businesses qualify, but there is one critical catch: a single-director-only company (no other employees on payroll above the secondary threshold) does NOT qualify. You need at least one other paid employee. The £100,000 previous-year NI bill cap was removed from 6 April 2025, so it now applies to most employers.
- What about pension auto-enrolment?
- If an employee earns more than £10,000 and is aged 22 to state pension age, you must auto-enrol them and contribute at least 3% on qualifying earnings (the slice between £6,240 and £50,270). They contribute at least 5%. The calculator's pension line shows the minimum 3% employer cost only; many employers offer higher matches as part of a competitive package.
- What costs are not included?
- The real all-in cost of a hire is typically 10-20% higher than the salary + NI + pension figure. Things to add: software per seat (Slack, Google Workspace, Xero seat), equipment refresh, training and conferences, recruitment fees if you use a recruiter, professional memberships, private health if offered, and any bonus or commission structure. The calculator gives you the statutory floor.
Budgeting a hiring round?
The calculator gives you a per-role number. The harder question is sequencing: who first, how the cash flow handles it, when the Employment Allowance gets used up, and what the all-in cost looks like layered over a 12-month plan. We model that with limited company directors monthly, and the conversation is free.
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