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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.

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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.

Where Compono fits

Loading a salary correctly tells you what a role costs. It does not tell you whether you are about to hire the right person for it. The most expensive line in any UK payroll is the hire who looked right on paper, cost you the full loaded amount, and left inside a year. Compono Hire runs the process every applicant tracking system runs, then adds behavioural and culture-fit data so the money you commit goes to someone who stays and performs.

See how it works

How it's calculated

The model adds the two costs every UK employer carries on a standard employee. Employer (secondary) National Insurance is 15% of earnings above the Secondary Threshold of £5,000 a year. Pension auto-enrolment is a minimum 3% employer contribution on qualifying earnings, which is the band between £6,240 and £50,270, not the whole salary. That band matters: a common mistake is applying 3% to gross pay, which overstates the cost. Figures are the 2026-27 tax year (from 6 April 2026). Not included here: the £10,500 Employment Allowance, which offsets your total employer NI bill at the business level rather than per employee, and the Apprenticeship Levy of 0.5%, which only applies to pay bills over £3 million. Lower NI rates also apply for employees under 21, apprentices under 25 and qualifying veterans, so this figure is the standard-case estimate.

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

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.