2026/27 tax year

What it really costs to employ someone

Salary is only part of the bill. Add employer's National Insurance and pension and you get the number that actually leaves your bank account.

£
£0£75k£150k

Are they a director?

No

Are they the only employee?

No

Employer pension contribution

%

Total cost to employ

£35,863

£2,989 a month

  • Gross pay
  • Employer's NI
  • Pension

For every £1 of salary, you're spending £1.02

Gross salary
Employer's National Insurance 15% on earnings above £5,000
Less Employment Allowance Up to £10,500 off your employer's NI bill
Employer pension contribution 3% of earnings between £6,240 and £50,270
Total annual cost
✓

Employment Allowance applies

You can knock up to £10,500 off your employer's NI bill this year.

Worth knowing

  • The Employment Allowance is a single £10,500 allowance for the whole business, not per employee — so if you already use it elsewhere on your payroll, the saving shown here may already be spoken for.
  • This covers pay, NI and pension only. Holiday cover, equipment, software seats, recruitment fees and training all sit on top.
  • Employer's NI and pension contributions are allowable expenses, so they reduce your corporation tax bill.
  • Different rules apply to under-21s, apprentices under 25 and qualifying veterans, where employer's NI can drop to zero up to a higher threshold.

Figures use 2026/27 rates and are a guide, not advice — your payroll will be the final word. Want someone to run the numbers properly? Talk to myQuarterly.