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True cost of an employee
calculator (UK)

See what a salary really costs once employer National Insurance and pension auto-enrolment land on top.

Your numbers

Fully loaded annual cost
 
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How much does an employee really cost in the UK?

On top of salary, an employer pays 15% National Insurance on earnings above £5,000 a year and a minimum 3% pension contribution on qualifying earnings between £6,240 and £50,270. For a typical salary that lands the fully loaded cost roughly 15 to 18% above base.

How we calculated this

We start with the base salary and add the two statutory costs every UK employer carries on a standard employee in 2026-27. Employer National Insurance is 15% of earnings above the £5,000 Secondary Threshold. The pension line is the 3% auto-enrolment minimum, charged on qualifying earnings only, the band from £6,240 to £50,270. Add both to the salary and you have the fully loaded cost of one person; multiply by headcount for the team. The result is a statutory floor, not a full budget. The working, the assumptions and the sources are below.

New to the term? Read the plain-English definition of pension auto-enrolment in the HR Glossary.

Your working
Assumptions
  • Uses the 2026-27 rates from 6 April 2026: employer NI at 15% above a £5,000 Secondary Threshold, pension at 3% of qualifying earnings between £6,240 and £50,270. Both roll every April, so re-run this after the next Budget.
  • Assumes the standard NI category. Employees under 21 and apprentices under 25 attract lower or nil employer NI on part of their pay, as do a few other groups such as qualifying veterans, so the figure is high for them.
  • Pension is the statutory minimum on qualifying earnings. If you contribute more, or use a certified alternative basis on full pensionable pay, your real cost is higher; if the employee has opted out, it is lower.
  • Leaves out the £10,500 Employment Allowance (it offsets the whole business's NI bill, not one payslip), the 0.5% Apprenticeship Levy on pay bills over £3 million, and every non-statutory cost: recruitment, equipment, benefits, office space. Treat this as the floor.
Sources

What to do about it

The loaded figure is what you commit the day the offer is signed. Whether it buys a year of output or a repeat of the recruitment is decided before then. These steps are for whoever builds the headcount case, whether or not they hold the budget.

1

Budget on the loaded number, not the advertised salary

Put the fully loaded figure, not the base, into the headcount request and the finance model, and label the tax year it uses. A team costed on base salary is understated by the NI and pension lines above, and finance finds out at year end.

2

Price the exit next to the entry

Take the loaded cost and ask what happens if this hire leaves inside twelve months: the loaded salary paid for partial output, plus the recruitment cost again. Write that number beside the loaded cost. It is the case for spending time on selection now.

3

Check the smaller lines before you sign off

Confirm the NI category (under-21s and apprentices under 25 are cheaper) and whether the pension is on qualifying earnings or full pay. Check whether the Employment Allowance is already claimed at business level. Ten minutes here stops the payroll bill surprising you in month one.

4
Where a tool helps

Define what a successful hire looks like at twelve months

Before the role goes out, write down what this person must have done and how they will need to work with the team to be worth the loaded cost. If that is written down, you can select for it. If it is not, you will select for whoever interviews best.

5

Re-run this every April

Thresholds and rates change with the tax year and the auto-enrolment review. Keep the loaded figure current for every role you plan to fill so each case is made on live numbers.

The loaded cost is set.
Whether it pays is not.

Compono Hire is an applicant tracking system (ATS) that measures fit before you make the offer. It runs the process side you expect (job posting, pipeline, interview scheduling, offers) and adds what most ATSs leave out: a validated work personality and culture fit read on every candidate, scored the same way each time and shown next to the skills screen.

Step 4 asks you to define what a good hire looks like for this team. Hire measures every candidate against it, so the loaded cost above lands on someone who stays and performs, and you are not paying it twice for the same seat.

See how it works
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Common questions

What is the employer National Insurance rate for 2026-27?

15% on earnings above the Secondary Threshold of £5,000 a year. Lower rates apply for employees under 21, apprentices under 25 and qualifying veterans.

Is pension auto-enrolment 3% of the whole salary?

No, and this is the most common error. The 3% minimum applies to qualifying earnings, the band between £6,240 and £50,270. Applying 3% to gross salary overstates the cost. Employers using a certified alternative basis have different minimums.

What is the Employment Allowance?

It lets eligible employers reduce their total employer National Insurance bill by up to £10,500 a year. It applies at the business level, not per employee, so it is not built into this figure. Sole-director companies with no other employee above the threshold cannot claim it.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with GOV.UK or your own adviser. Last reviewed July 2026.

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Pension auto-enrolment

The plain-English definition, with the calculators and rules that sit around it.

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