UK Cost of Employing Someone Calculator

How to use this calculator

Enter the employee's pay and working pattern, then work through each cost group. Every figure defaults to a working example with current statutory National Insurance and pension figures — replace it with your own numbers, or leave a group at zero if it genuinely does not apply.

1. Enter gross annual salary, hours and days per week, working weeks per year and headcount.
2. Check or change the employer NI rate, secondary threshold, and whether Employment Allowance applies — enter any amount already used against other employees not in this calculator.
3. Choose the employer pension contribution rate and whether it is worked out on qualifying earnings or the whole salary.
4. Enter any bonus, commission or overtime as a flat amount or a percentage of salary, plus any employee benefits, workplace overheads, recruitment costs or other annual employer costs that apply — leave any of them at 0 if they do not.

Results update as you change any figure. Use Reset to return to the worked example.

What do I need to enter?

• Gross annual salary — greater than 0 and up to £10,000,000.
• Hours per week, Days per week and Working weeks per year — up to 168 hours, 7 days and 52.14 weeks. They only set the daily and hourly costs.
• Headcount — a whole number of employees from 1 to 10,000. Above 1, a team total is shown.
• Employer National Insurance: the Employer NI rate and Secondary threshold start at 15% and £5,000, and can be edited. Employer NI is charged on earnings above the threshold.
• Apply Employment Allowance — with its amount (£10,500 by default) and Employment Allowance already used elsewhere this tax year, the part already applied to other employees not entered here (0 or more, blank means 0). The remaining allowance is deducted from employer NI once across the whole team.
• Employer pension contribution rate (3% by default) and Pension calculation basis — Qualifying earnings, with its lower threshold and upper limit, or Whole salary. Both bases use salary plus any bonus, commission and overtime.
• Employee benefits — private health insurance, life assurance, and sick pay or absence allowance. Optional.
• Workplace overheads — Training budget, equipment and software, travel or vehicle costs, Workspace or desk cost, and uniform or PPE. Each is an optional annual cost per employee; blank means 0.
• Recruitment and onboarding — a one-off cost, counted in the annual total.
• Bonus, commission and overtime — each a flat amount or a percentage of salary (up to 500%). They count as earnings for employer NI and pension.
• Other costs — an Apprenticeship Levy allocation and other annual employer costs.

What do the results show?

• Total annual employer cost — the main figure: salary plus every employer cost you entered.
• Monthly, weekly, daily and hourly employer cost — the annual total divided over your working pattern.
• On-cost above salary — the total minus gross salary, in pounds and as a percentage of salary.
• Summary and Breakdown — the total split into salary, employer NI, pension, benefits, overheads, recruitment and other costs.
• Assumptions used in this result — the rates and thresholds behind the figures, plus Team total and Sensitivity tables where they apply.

How does this calculator work?

The total annual employer cost adds gross salary, bonus, commission, overtime, net employer National Insurance, employer pension, benefits, overheads, recruitment and onboarding, and any other annual costs you enter. Employer National Insurance and pension are both worked out on earnings — salary plus bonus, commission and overtime — and are statutory calculations you can override — see the UK Take-Home Pay Calculator for the employee's side of the same salary.

For example, a £35,000 salary with a 15% employer NI rate above a £5,000 secondary threshold, Employment Allowance applied, a 3% pension on qualifying earnings, £1,300 of overheads and £1,500 of recruitment cost gives a total annual employer cost of £38,662.80 — an on-cost of £3,662.80, or about 10.5%, above the £35,000 salary. That works out at £3,221.90 a month, £743.52 a week, £148.70 a day and £19.83 an hour on a 37.5-hour, 5-day week.

What does this calculator assume?

• Every figure — salary, rates, thresholds, benefits and overheads — is one you enter or a clearly labelled statutory default you can change. Nothing is inferred on your behalf.
• Employer NI and pension defaults reflect current UK secondary threshold, Employment Allowance and auto-enrolment qualifying-earnings figures, which are reviewed periodically at fiscal events — always check the current rates on GOV.UK before relying on this for real payroll decisions.
• Bonus, commission and overtime are included as earnings for employer National Insurance and pension, alongside gross salary. Only the Apprenticeship Levy allocation stays a separate flat annual cost — the real Levy is charged on an employer's whole pay bill above a shared allowance, not on one employee's earnings.
• Employment Allowance is one amount per employer, not per employee. If you employ others not entered into this calculator, enter what's already been used against them so only the genuine remaining headroom offsets this employee's National Insurance.
• Working weeks per year already reflects paid time off for a salaried employee, so no separate statutory-leave line is added — it would double count against the salary already entered.
• For the employee's own take-home pay from the same gross salary, see the UK Take-Home Pay Calculator.
• For the cost at the other end of employment, see the UK Redundancy Pay Calculator.

Important information

Important: This calculator is a planning estimate built entirely from the figures and assumptions you enter or edit. It is not payroll software, a tax filing tool, legal advice, or an official HMRC calculator, and it does not recommend hiring, replacing or budgeting decisions.

Run real payroll through payroll software or a payroll provider, and check current statutory rates, thresholds and treatment with HMRC or a qualified accountant.

Sources

The auto-enrolment earnings thresholds behind the pension default are set out on the Pensions Regulator's earnings thresholds page.

Frequently asked questions