Free business tool — 2026/27
True Cost of an Employee Calculator UK 2026/27
An employee earning £30,000 does not cost you £30,000. Once you add employer's National Insurance, pension contributions, equipment, software, workspace and recruitment costs, the true figure is typically 30–50% higher than the salary alone. This calculator shows you the real number before you commit to hiring.
How to use: Enter the gross salary, pension contribution rate and any additional costs. The calculator will show the full annual cost to your business.
Understanding your results
The biggest hidden cost is employer's National Insurance. In 2026/27, employers pay 15% on earnings above £5,000 per employee. For a £35,000 salary, that adds £4,500 before you consider anything else. Auto-enrolment pension contributions add a further 3% minimum (£1,050 on £35,000). Then factor in equipment, training, recruitment agency fees and management time.
Understanding the true cost is essential for pricing your products or services correctly. If you underprice because you forgot to account for employer costs, every sale becomes less profitable than you expected.
Frequently asked questions
What is the employer's NIC rate for 2026/27?
15% on earnings above £5,000 per employee. The Employment Allowance of £10,500 may offset some or all of this for eligible businesses.
What is the minimum pension contribution an employer must make?
3% of qualifying earnings under auto-enrolment. Qualifying earnings for 2026/27 are between £6,240 and £50,270. Many employers contribute more than the minimum to remain competitive in recruitment.
How much does it really cost to hire someone on £30,000?
Approximately £38,000–£42,000 when you include employer's NIC (£3,750), pension (£900+), equipment and software (£1,000–£2,000), and a share of recruitment costs. The exact figure depends on your industry and the role, but budgeting 30–40% above salary is a realistic starting point.
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