Minimum auto-enrolment contribution is 3%
Company car, health insurance, etc.
Available if your NI bill was under £100,000 and you're not a sole-director company
Applies if annual payroll exceeds £3 million
Reg. 07380272 · England & Wales · Est. 2010
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Total Annual Cost
£40,550.00
Employee Take-Home
£28,719.60
Efficiency Ratio
70.8%
of your spend reaches the employee
Cost Breakdown
Everything you need to know about the true cost of employment in the UK
What are the hidden costs of employment?
When you hire an employee in the UK, the cost goes well beyond the salary shown on their contract. As an employer, you are responsible for additional statutory costs that can add 15-20% or more on top of the gross salary, including employer NI, workplace pension, and potentially the Apprenticeship Levy.
What is employer National Insurance?
Employer NI is charged at 15% on each employee's earnings above £5,000 per year. Unlike employee NI, there is no upper earnings limit. Eligible employers can claim Employment Allowance of up to £10,500 to offset their NI bill.
Auto-enrolment pension rules
Employers must contribute a minimum of 3% of qualifying earnings to a workplace pension scheme. Qualifying earnings are those between £6,240 and £50,270 per year for 2025/26. Many employers choose to contribute more than the minimum as part of their benefits package.
Apprenticeship Levy & Benefits in Kind
The Apprenticeship Levy applies to employers with an annual payroll exceeding £3 million, charged at 0.5% with a £15,000 allowance. Benefits in Kind (company car, health insurance, etc.) must be reported on form P11D with Class 1A NI at 15% on the taxable value.
HMRC-Aligned: This calculator uses official 2025/26 employer NI rates, pension minimums, and levy thresholds. Results are indicative and based on a single employee scenario. For complex payroll situations, consult a qualified accountant.
This calculator uses official rates and thresholds from:
Last verified: February 2026 · Tax year 2025/26. Results are indicative — consult a qualified accountant for personalised advice.
Reviewed by M. Samiuddin Quadri, ACCA — Chartered Certified Accountant at Gladstone & Co. · Updated for the 2025/26 tax year.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms