True Employment Cost Calculator
Employer NIC: 15% above £5,000/yr threshold (from April 2025). Employer pension: minimum 3%.
About This Calculator
This employer payroll cost calculator gives you the complete picture of what it actually costs to employ someone in the UK in 2026. The headline salary is only part of the story — employers also pay National Insurance contributions, pension contributions, and potentially the Apprenticeship Levy.
Following the October 2024 Autumn Budget, employer NIC increased from 13.8% to 15% from April 2025, and the Secondary Threshold dropped from £9,100 to £5,000, significantly increasing the cost of employment for most businesses.
Frequently Asked Questions
What is the true cost of employing someone in the UK 2026?
The true cost of employing someone in the UK includes their gross salary plus employer National Insurance contributions (15% on earnings above £5,000 from April 2025), employer pension contributions (minimum 3% under auto-enrolment), and any other on-costs such as training, equipment or recruitment fees. For an employee earning £30,000, the total cost is typically 20–25% above the gross salary.
How much is employer NIC in 2026?
From April 2025 (covering 2025/26 and 2026/27 tax years), employer National Insurance Contributions are charged at 15% on an employee's earnings above £5,000 per year (the Secondary Threshold). This replaced the previous rate of 13.8% above £9,100.
What changed to employer NIC in April 2025?
In the October 2024 Autumn Budget, the Chancellor announced two changes effective from April 2025: the employer NIC rate increased from 13.8% to 15%, and the Secondary Threshold (the point at which employer NIC becomes payable) was reduced from £9,100 per year to £5,000. Both changes significantly increased employment costs for businesses.
What is the employer NIC threshold in 2026/27?
The employer NIC Secondary Threshold in 2026/27 is £5,000 per year (£417 per month / £96 per week). Employer NIC at 15% is due on any earnings above this threshold. The threshold was reduced from £9,100 in April 2025.
How can employers reduce their NIC costs?
Employers can reduce NIC costs by: (1) Claiming the Employment Allowance (£10,500 in 2025/26) if eligible, which offsets employer NIC; (2) Using salary sacrifice schemes for pensions, which reduces the gross salary subject to NIC; (3) Offering tax-free benefits such as cycle-to-work schemes; (4) Employing apprentices under 25 who are exempt from employer NIC on earnings below the Upper Secondary Threshold.