Employer Cost Calculator
Use this employer cost calculator to work out what an employee's salary really costs your business. Enter the annual salary, and the calculator adds employer National Insurance and workplace pension on top: a £30,000.00 salary costs £34,462.80 a year. Add any other employer costs for the full picture.
Gross pay before tax and National Insurance.
The auto-enrolment minimum is 3%. Qualifying earnings are the slice of the salary between £6,240.00 and £50,270.00 a year.
Anything else this employee costs you each year — benefits, insurance, equipment, software seats — added exactly as entered.
Total cost of employing
£34,462.80 per year
£2,871.90 per month — a £30,000.00 salary really costs £34,462.80.
- Gross salary:
- £30,000.00 per year.
- Employer National Insurance:
- £25,000.00 above the £5,000.00 Secondary Threshold × 15% = £3,750.00 per year (£312.50 per month).
- Employer pension:
- qualifying earnings of £23,760.00 (the salary slice between £6,240.00 and £50,270.00) × 3% = £712.80 per year (£59.40 per month).
- The cost on top:
- £4,462.80 a year on top of the salary — 14.88% more than the headline salary.
Rates used: employer Class 1 rate 15% above the £5,000.00-a-year Secondary Threshold (2026/27 rates — verified against GOV.UK); pension band 2026/27 rates — verified against GOV.UK.
Opens your browser's print view with a clean summary of this calculation — choose “Save as PDF” there to keep a copy.
Paying staff every month? Zoho Payroll runs the calculation, payslips and filings in one place.
Once you know the true cost of a role, compare the best HR systems for UK employers for the employee records behind the numbers. If you are building a hiring plan, the best workforce planning software guide shows how to price the team before you recruit.
What a £30,000.00 salary really costs, line by line
| Gross salary | £30,000.00 |
| Employer National Insurance (15% of the £25,000.00 above the £5,000.00 Secondary Threshold) | +£3,750.00 |
| Employer pension (3% of qualifying earnings of £23,760.00) | +£712.80 |
| Other employer costs | £0.00 in this example |
| Total cost of employing | £34,462.80 a year · £2,871.90 a month |
The headline salary is only the starting point: the charges on top add £4,462.80 a year, which is 14.88% more than the salary itself — a total of £34,462.80 for every £30,000.00 of pay, or about £114.88 of cost for every £100.00 of salary.
Total employer cost at other salaries
| Salary | Employer NI / year | Employer pension / year | Total cost / year | Cost on top |
|---|---|---|---|---|
| £25,000.00 | £3,000.00 | £562.80 | £28,562.80 | 14.25% |
| £30,000.00 | £3,750.00 | £712.80 | £34,462.80 | 14.88% |
| £40,000.00 | £5,250.00 | £1,012.80 | £46,262.80 | 15.66% |
| £50,000.00 | £6,750.00 | £1,312.80 | £58,062.80 | 16.13% |
| £60,000.00 | £8,250.00 | £1,320.90 | £69,570.90 | 15.95% |
Standard employee, pension at the 3% auto-enrolment minimum, no other costs, 2026/27 rates. The percentage on top rises with the salary because the £5,000.00 threshold shelters a smaller share of a bigger salary.
How the total cost of employing is worked out
1. Employer National Insurance — 15% above £5,000
Employer (secondary) Class 1 National Insurance is charged at 15% on the part of an employee's pay above the Secondary Threshold of £5,000.00 a year — the first £5,000.00 of earnings attracts no employer NICs at all. The charge is the employer's cost, on top of the salary; it is never deducted from the employee's pay. Use the employer National Insurance calculator for the under-21 and apprentice categories and the Employment Allowance.
2. Workplace pension — a percentage of a band, not the whole salary
Under auto-enrolment, pension percentages apply to qualifying earnings only: the slice of the salary between £6,240.00 and £50,270.00 a year. The employer minimum is 3% of that slice, so on a £30,000.00 salary the minimum is 3% of £23,760.00 = £712.80 — not 3% of the full £30,000.00. Employers matching employee contributions or paying a flat percentage of full salary pay more; set your own percentage in the calculator.
3. What else adds to the true cost
Two payroll items sit outside this calculator, for opposite reasons. The Employment Allowance can take up to £10,500.00 a year off an eligible employer's total NIC bill, but it applies to the whole payroll, not to one employee, so it is not deducted here. The Apprenticeship Levy goes the other way — it adds cost, but only for employers whose annual pay bill exceeds £3 million, so almost no small employer pays it. Everything else — benefits in kind, employer insurance, equipment, software, training — varies by employer, which is what the other-costs field is for: add your own figure and it joins the total exactly as entered.
Rates used by this calculator (2026/27)
| Rate or threshold | Amount (2026/27) |
|---|---|
| Employer Class 1 rate (main rate) | 15% of earnings above the threshold |
| Secondary Threshold | £5,000.00 per year (about £417 per month) |
| Auto-enrolment qualifying-earnings band | £6,240.00 to £50,270.00 per year |
| Employer pension minimum | 3% of qualifying earnings |
| Employment Allowance (whole-payroll, not per employee) | £10,500.00 per year off the employer NIC bill |
Rates: 2026/27 rates — verified against GOV.UK; pension band: 2026/27 rates — verified against GOV.UK. Figures verified: 7 November 2026. Always check GOV.UK before running payroll, because a Budget can change the figures from the next April.
Frequently asked questions
How much does a £30,000 salary really cost an employer?
A £30,000.00 salary costs £34,462.80 a year (£2,871.90 a month) before any other costs: the £30,000.00 of gross pay, plus £3,750.00 of employer National Insurance (15% of the £25,000.00 above the £5,000.00 Secondary Threshold), plus £712.80 of workplace pension at the 3% auto-enrolment minimum on qualifying earnings of £23,760.00. That is £4,462.80 — 14.88% — on top of the headline salary.
What counts towards the total cost of employing someone?
Three charges land on every hire: the gross salary itself, employer Class 1 National Insurance on top of it, and the employer's workplace pension contributions under auto-enrolment. Beyond those, employers add their own costs — benefits, insurance, equipment, software, training — which is why this calculator has an other-costs field: enter them exactly as they are and they are added to the total. The employee's own Income Tax and National Insurance never count: those come out of the employee's pay, not the employer's pocket.
How is employer National Insurance worked out?
Employer (secondary) Class 1 National Insurance is charged at 15% on the part of an employee's pay above the Secondary Threshold of £5,000.00 a year — the first £5,000.00 attracts no employer NICs at all. On a £30,000.00 salary that is (£30,000.00 − £5,000.00) × 15% = £3,750.00 a year. Employees under 21 and apprentices under 25 attract a 0% rate up to £50,270.00 a year — the employer NI calculator on this site works those categories out in full.
How much does an employer have to pay into a workplace pension?
Under auto-enrolment the employer must pay at least 3% of the employee's qualifying earnings — the slice of pay between £6,240.00 and £50,270.00 a year. On a £30,000.00 salary the qualifying slice is £23,760.00, so the minimum employer contribution is £712.80 a year. Many employers pay more than the minimum, which is why the percentage in this calculator is yours to change.
Does this calculator include the Employment Allowance or the Apprenticeship Levy?
Neither, deliberately. The Employment Allowance takes up to £10,500.00 a year off an eligible employer's total National Insurance bill, so it belongs to the whole payroll rather than to one employee — the employer NI calculator here shows its effect on a single salary. The Apprenticeship Levy is charged only to employers whose annual pay bill exceeds £3 million, so it never applies to the typical employer using this calculator and is left out rather than estimated.
Related calculators
Employer National Insurance Calculator
The National Insurance line on its own: employer Class 1 NICs by employee category, with the Employment Allowance applied and the under-21 and apprentice rates.
Open the employer NI calculator →Payslip Generator
The employee's side of the same payroll run: build a payslip showing the employee's Income Tax and National Insurance on any gross pay, ready to print.
Open the generator →Take-Home Pay Calculator
What the employee actually keeps: take-home pay on any salary after Income Tax and employee National Insurance, per year, month and week.
Open the calculator →Take-Home Pay, Explained
Our in-depth guide to how take-home pay is figured — what comes off before an employee is paid, and how to check a payslip line by line.
Read the guide →The employer's cost and the employee's take-home pay are the two sides of the same salary: this page totals what the employer pays out, and the take-home pay guide explains what the employee keeps after their own tax and National Insurance.