Hiring someone costs more than their salary. Use this free calculator to work out the real annual and per-payslip cost of an employee in the 2026/27 tax year, including employer National Insurance, the minimum auto-enrolment pension and, if you want, our payroll fee.
Want us to run payroll for your team? From £5.50 + VAT per payslip, with RTI, pensions and payslips included.
How the calculator works
It uses the 2026/27 figures from HMRC's rates and thresholds for employers, worked out over a full tax year (6 April 2026 to 5 April 2027). Per-payslip figures are the annual cost divided evenly across the pay periods.
- Employer National Insurance: 15% on earnings above the £5,000 secondary threshold, with no upper limit.
- Under-21s and apprentices under 25: employers pay 0% National Insurance on earnings up to £50,270, then 15% above that.
- Employment Allowance: eligible employers can reduce their employer National Insurance bill by up to £10,500 a year in total. It applies across your whole payroll, not to each employee, and companies where a director is the only employee paid above the secondary threshold can't usually claim it. See GOV.UK's Employment Allowance guidance.
- Workplace pension: workers aged 22 to State Pension age earning more than £10,000 a year must be auto-enrolled. The legal minimum employer contribution is 3% of qualifying earnings between £6,240 and £50,270, according to The Pensions Regulator. Your scheme may use a different basis or a higher percentage.
- Minimum wage check: the calculator warns you if the pay works out below the National Minimum Wage rates from 1 April 2026: £12.71 for 21 and over, £10.85 for 18 to 20, and £8.00 for under-18s and apprentices.
It doesn't include the Apprenticeship Levy (only for employers with a pay bill over £3 million), statutory payments such as sick or maternity pay, holiday cover, recruitment, equipment or benefits in kind. Scottish and Welsh income tax rates don't affect employer costs, so the result is the same across the UK.
Worked examples for 2026/27
Each example assumes an employee aged 22 or over, paid monthly, with a 3% employer pension on qualifying earnings and no Employment Allowance.
| Salary | Employer NI | Employer pension | Total yearly cost |
|---|---|---|---|
| £24,784.50 (minimum wage, 37.5 hours) | £2,967.68 | £556.34 | £28,308.51 |
| £25,000 | £3,000.00 | £562.80 | £28,562.80 |
| £60,000 | £8,250.00 | £1,320.90 | £69,570.90 |
If the £25,000 employee were 20 years old instead, the employer National Insurance would fall to £0. If your business can claim the Employment Allowance, it would cover that £3,000 National Insurance bill in full.
These figures are estimates for planning and budgeting. For exact payroll figures, including pay-period thresholds and pension scheme rules, and we'll run the numbers for your team.