Employer NI and cost of employment calculator
Employing someone on a £30,000 salary costs about £34,463 a year in 2026/27, including £3,750 of employer National Insurance at 15% above £5,000, under gov.uk's rates and thresholds for employers, plus a 3% minimum pension contribution. This calculator gives the on-cost for any salary, category and pension rate you enter.
What is the cost breakdown for employing someone?
| Gross salary | £30,000 |
|---|---|
| Employer National Insurance (15% above £5,000) | £3,750 |
| Less Employment Allowance | £0 |
| Employer pension contribution | £713 |
| Apprenticeship levy (0.5%) | £0 |
| Other costs | £0 |
| Total cost of employment | £34,463 |
How is the cost of an employee calculated?
The cost of an employee is the salary plus everything the law or the contract adds on top. Employer National Insurance is the largest addition: 15% of pay above the secondary threshold of £5,000 a year, under gov.uk's rates and thresholds for employers, with no upper limit. It rises pound for pound with salary. For employees under 21, apprentices under 25 and veterans in their first year of civilian work the rate is 0% up to £50,270, which makes those hires several thousand pounds a year cheaper at most salaries.
The pension line uses the automatic enrolment minimum by default: 3% of qualifying earnings, the slice of pay between £6,240 and £50,270. Switch to whole salary if the scheme is defined that way. The Employment Allowance is a business-wide reduction of up to £10,500 in the employer NI bill, described on gov.uk's Employment Allowance page, and is shown here only as an option because it can be used once. The apprenticeship levy applies only where the pay bill exceeds £3 million, under gov.uk's apprenticeship levy guidance. The employee's own take-home pay is calculated alongside, so the result shows how much of the total spend actually reaches them.
| Employer NI | 15% of salary above £5,000; 0% to £50,270 for relieved categories |
|---|---|
| Pension | employer percentage of qualifying earnings or whole salary |
| Levy | 0.5% of salary where the pay bill is over £3 million |
| Per hour | total cost divided by weekly hours multiplied by 52 |
What does a worked example of employer costs look like?
A standard employee on £30,000 with the minimum 3% pension costs an estimated £34,463 a year. That is £3,750 of employer National Insurance and £713 of pension on top of salary, an on-cost of 14.9%. That works out at £2,872 a month, or £17.67 for every hour of a 37.5 hour week. The employee takes home an estimated £25,120 after their own tax and National Insurance, 72.9% of what the business spends. Hiring a 20-year-old on the same salary cuts the employer National Insurance to £0, taking the total to £30,713. Setting an unused Employment Allowance against the standard employee brings the bill to £30,713.
How should I read the employer cost result?
- National Insurance is assessed per pay period. Payroll applies the thresholds monthly or weekly, so an employee with irregular pay or a bonus month will produce a slightly different annual figure from the salary-based one here.
- The Employment Allowance is one pot. Ticking the box for two employees double-counts it. The real saving is up to £10,500 across the whole payroll.
- Statutory payments and cover are extra. Sick pay, maternity pay, holiday cover, recruitment fees and training are real costs that no salary-based calculation captures.
- Salary sacrifice reduces the bill. Where an employee sacrifices salary for pension, the employer's NI falls by 15% of the sacrificed amount, which is why many employers share that saving.
Common questions
How much does it cost to employ someone on £30,000?
About £34,463 a year in 2026/27: the £30,000 salary, £3,750 of employer National Insurance at 15% above £5,000, and £713 of minimum pension contribution at 3% of qualifying earnings. That is an on-cost of 14.9% before recruitment, equipment, training or cover.
What is the employer National Insurance rate for 2026/27?
15% of each employee's pay above the secondary threshold of £5,000 a year (£417 a month, £96 a week). There is no upper limit. The rate rose from 13.8% and the threshold fell from £9,100 in April 2025, which added several hundred pounds to the cost of most jobs.
What is the Employment Allowance?
A reduction of up to £10,500 a year in an eligible employer's total employer National Insurance bill. It is claimed once per business through payroll, not per employee, so the saving shown here is only meaningful if the allowance has not already been used against other staff.
Do I pay employer National Insurance for an employee under 21 or an apprentice?
Not on earnings up to £50,270 a year. Employees under 21, apprentices under 25 and veterans in their first year of civilian employment attract a 0% employer rate up to that threshold and 15% above it. On a £30,000 salary that saves £3,750 a year compared with a standard employee.
What is the minimum employer pension contribution?
3% of qualifying earnings, the band between £6,240 and £50,270 a year, for any worker earning £10,000 or more who is aged 22 to State Pension age. Many employers pay a percentage of the whole salary instead, which the calculator also handles.
Who pays the apprenticeship levy?
Employers with an annual pay bill over £3 million pay 0.5% of the whole pay bill, less a £15,000 allowance. Smaller employers do not pay it, so leave the box unticked unless the business is above that size.
What is the cost breakdown for employing someone?
The total is the gross salary plus employer National Insurance above £5,000, the employer pension contribution, any apprenticeship levy, and other costs entered. On the £30,000 example that comes to £34,463, made up of £30,000 salary, £3,750 employer NI and £713 pension.
How is the cost of an employee calculated?
Employer National Insurance is 15% of pay above £5,000 a year, with reliefs to £50,270 for under-21s, apprentices under 25 and first-year veterans, under gov.uk's rates and thresholds for employers. Pension defaults to 3% of qualifying earnings between £6,240 and £50,270. The Employment Allowance and levy, where they apply, are added on top of that base figure.
What does a worked example of employer costs look like?
A standard employee on £30,000 with a 3% pension costs £34,463 a year: £3,750 of employer National Insurance and £713 of pension on top of salary, an on-cost of 14.9%. A 20-year-old on the same salary costs £30,713 because of the under-21 employer NI relief.
How should I read the employer cost result?
National Insurance is assessed per pay period by payroll, so irregular pay or a bonus month can shift the annual figure shown here slightly. The Employment Allowance is one pot per business, not per employee, worth up to £10,500 across the whole payroll. Statutory payments, recruitment and cover are real costs this calculator does not include.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.