True cost of an employee calculator (UK, 2026/27)
Salary is only part of it. Add employer National Insurance, auto-enrolment pension and your Employment Allowance position to see what a hire really costs.
The hire
2026/27 figures: employer NI 15% above the £5,000 secondary threshold; auto-enrolment on qualifying earnings between £6,240 and £50,270 (3% employer minimum); Employment Allowance £10,500, open to employers of all sizes since April 2025. Gross costs - salary sacrifice, apprenticeship levy and recruitment costs not included.
An employee on £30,000 actually costs about £34,460 a year in 2026/27 - salary plus £3,750 employer National Insurance (15% of everything above £5,000) and £713 minimum pension - around 15% on top of the advertised salary before kit, cover or training. If your Employment Allowance is still available it absorbs up to £10,500 of the NI.
How much does an employee on £30,000 actually cost?
| Cost line | How it's worked out | Amount |
|---|---|---|
| Gross salary | the advertised number | £30,000 |
| Employer National Insurance | (£30,000 − £5,000) × 15% | £3,750 |
| Auto-enrolment pension (min.) | (£30,000 − £6,240) × 3% | £712.80 |
| True annual cost | +14.9% over salary | £34,462.80 |
That percentage climbs with salary: NI has no upper cap, so a £60,000 hire carries £8,250 of employer NI. Use the calculator above with your own numbers - and remember recruitment, onboarding time and holiday cover sit on top.
What is employer National Insurance in 2026/27?
Employers pay 15% Class 1 NI on earnings above £5,000 a year (the secondary threshold, fixed at this level until April 2028 - gov.uk rates). The Employment Allowance knocks up to £10,500 a year off an employer's total NI bill, and since April 2025 it's open to employers of any size - the old £100,000 liability cut-off is gone (eligibility on gov.uk). It's one allowance across your whole payroll, not per person - which is why the calculator asks whether yours is already spoken for.
What does auto-enrolment pension cost an employer?
The minimum is 3% of qualifying earnings - the band between £6,240 and £50,270, frozen again for 2026/27 - for any worker earning over the £10,000 trigger (gov.uk). Total minimum contributions are 8%, with the employee and tax relief making up the rest. Many employers pay more than 3% - set your own rate in the calculator.
Is this the same as cost per hire?
No, and the two get mixed up constantly. This page answers what does employing this person cost? - salary, employer NI and pension, year after year. Cost per hire answers what did recruiting cost? - agency fees, advertising and interview time, divided by the hires you made. One is a budgeting figure, the other measures your hiring process. If you are asking "can we afford this role?", you are on the right page.
What other costs should you budget for?
- Sick pay exposure: since April 2026 SSP runs from day one at up to £123.25 a week - roughly £24.65 per sick day for a five-day worker, unreclaimable. Our SSP cost calculator does the sums.
- Family leave: statutory maternity and paternity pay are largely reclaimable - small employers get 109% back; see the maternity pay employer calculator.
- Kit, licences and training - typically £500-£2,000 in year one for an office role.
- Holiday cover: 5.6 weeks' statutory leave means ~11% of the year is paid non-working time - real money in small teams (how UK annual leave works).
Every statutory figure used here is on our 2026/27 statutory rates table, updated each April.
This calculator applies the statutory rules as published and shows its working, but it cannot know your contracts, your policies or anything unusual about the case. Treat the figure as a starting point, and take advice on anything contested or expensive.
Know your people costs all year
CoDash keeps salaries, working patterns, leave, sickness and overtime in one place - with payroll-ready exports, so the real cost of the team is never a spreadsheet archaeology project.