This calculator works out the full yearly and monthly cost of employing someone in 2026/27: gross salary, employer National Insurance and the employer pension contribution, less any Employment Allowance. Employer Class 1 National Insurance is 15% on pay above the secondary threshold of £5,000 a year, and eligible employers can knock up to £10,500 a year off their bill through the Employment Allowance. On a £30,000 salary with a 3% pension, the true cost is about £34,463, or 14.9% more than the salary.
Quick answers
- Employer National Insurance 2026/27: 15% on each employee’s earnings above £5,000 a year (£96 a week, £417 a month).
- Employment Allowance: up to £10,500 a year per eligible employer, not per employee, set against employer Class 1 National Insurance.
- Pension minimum: at least 3% of qualifying earnings between £6,240 and £50,270 for auto-enrolled staff.
- True cost of a £30,000 role: about £34,463 a year without the Employment Allowance, or about £30,713 if the allowance covers all of the National Insurance.
- Who cannot claim the allowance: a company whose only employee paid above the secondary threshold is its sole director.
- Apprenticeship Levy: 0.5% of the pay bill, but only for employers with a pay bill over £3 million.
How the calculator works
You enter the salary, the employer pension percentage and whether to set the Employment Allowance against this role.
- Employer National Insurance. Salary minus £5,000, multiplied by 15%. Pay below £5,000 attracts none.
- Employment Allowance. If you choose yes, the calculator takes up to £10,500 off the National Insurance for this role. It assumes the whole allowance is available for this one person.
- Pension. The employer percentage is applied to qualifying earnings: salary capped at £50,270, minus £6,240.
- Total. Salary plus National Insurance after the allowance, plus pension. It also shows the monthly cost and the cost on top of salary as a percentage.
It leaves out the Apprenticeship Levy and costs such as equipment, training, recruitment and holiday cover.
Worked example
A small company hires its first employee on £30,000 with a 3% employer pension contribution.
| Cost | Without Employment Allowance | With Employment Allowance |
|---|---|---|
| Gross salary | £30,000 | £30,000 |
| Employer NI (15% of £25,000) | £3,750 | £0 (allowance used: £3,750) |
| Employer pension (3% of £23,760) | £713 | £713 |
| Total yearly cost | £34,463 | £30,713 |
| Monthly cost | £2,872 | £2,559 |
| Cost on top of salary | 14.9% | 2.4% |
The allowance is £10,500 for the whole business, so the £6,750 left over could cover employer National Insurance on other staff.
What employers get wrong about staff costs
The most common error is counting the Employment Allowance more than once.
- The allowance is per employer. If you have three staff, the £10,500 is shared across all of them, so do not set the full amount against each role.
- Connected companies get one allowance. Only one company in a group of connected companies can claim it.
- Sole director companies are excluded. If the director is the only employee paid above the secondary threshold, the company cannot claim.
- The allowance stops at £10,500. It reduces employer National Insurance each payroll run until the allowance is used up or the tax year ends.
- Salary is not the whole cost. Holiday, sick pay, equipment and training come on top of the figures here. Statutory Sick Pay and family leave pay are paid through payroll too.
For a fuller list of costs, see how much an employee really costs and our guide to the Employment Allowance. The employer NI calculator handles several employees, and taking on your first employee covers the set-up steps.
Sources
- Rates and thresholds for employers 2026 to 2027 (HMRC)
- Employment Allowance (GOV.UK)
- Employment Allowance: check if you’re eligible (GOV.UK)
- Automatic enrolment earnings thresholds (The Pensions Regulator)
- Budget 2026 Annex A: rates and allowances (HM Treasury)
Frequently asked questions
How much is employer National Insurance in 2026/27?
15% of each employee’s earnings above £5,000 a year. On a £30,000 salary that is £3,750.
Is the Employment Allowance £10,500 per employee?
No. It is up to £10,500 a year for the whole business, and only one company in a connected group can claim it.
Can a one-person limited company claim the Employment Allowance?
Not if the director is the only employee paid above the secondary threshold. It becomes available once someone else is also paid above it.
Does the calculator include the Apprenticeship Levy?
No. The levy is 0.5% of the pay bill and only applies to employers with an annual pay bill over £3 million, after a £15,000 allowance.
Will the figures change in 2027/28?
Budget 2026 Annex A keeps employer National Insurance at 15% above £96 a week and the Employment Allowance at £10,500 for 2027/28.