Tax calculators
Employee Cost Calculator
Work out what an employee really costs: gross salary plus employer National Insurance, pension contributions and any other annual employment costs.
Estimated total employer cost
£34,650
per year
£2,888 per month
Cost breakdown
- Gross salary
- £30,000
- Employer National Insurance
- £3,750.00
- Employer pension contribution
- £900.00
- Total annual cost
- £34,650.00
- Monthly cost
- £2,887.50
- Cost above the salary15.5% more than the gross salary
- £4,650.00
Employer National Insurance band by band
| Band | Rate | Amount | Tax |
|---|---|---|---|
| Earnings above the Secondary Threshold (£5,000) | 15.00% | £25,000.00 | £3,750.00 |
What makes up the cost
- Gross salary — £30,000 (87%)
- Employer NIC — £3,750 (11%)
- Employer pension — £900 (3%)
These calculations are estimates based on the information entered and the tax rates and assumptions shown. They are intended as a general guide and do not constitute tax advice. Your actual tax position may differ depending on your circumstances, reliefs, other income and applicable tax rules.
About this tool
What the employee cost calculator does
A salary figure is only part of what a hire costs. This calculator adds employer National Insurance and employer pension contributions to the gross salary, along with any other annual costs you enter, and shows the annual and monthly total.
It is useful when you are budgeting for a new role, comparing a permanent hire against contract work, or explaining to a team why a pay rise costs more than the rise itself.
Method
How the calculation works
Employer National Insurance for 2026/27 is charged at 15% on earnings above the secondary threshold of £5,000. For categories H, M and Z — apprentices under 25 and employees under 21 — the rate is 0% up to the Upper Secondary Threshold of £50,270, and the standard rate applies above that.
The Employment Allowance of £10,500 per business per year is only applied where you confirm the business qualifies. It is never assumed.
Employer pension contributions are applied as a percentage of gross salary. Other costs are added as entered.
Worked example
A £30,000 salary in 2026/27
On a salary of £30,000 with no Employment Allowance, employer National Insurance is 15% of the £25,000 above the £5,000 secondary threshold, which is £3,750.
A 3% employer pension contribution on full salary adds £900.
The total annual cost is £34,650, or £2,887.50 a month — around 15.5% more than the salary itself, before any equipment, insurance or training is counted.
Assumptions
What this calculator assumes
It assumes a full tax year of employment at a constant salary, one employee at a time, and that no special reliefs apply beyond the National Insurance category you select. It does not include the Apprenticeship Levy, statutory payments such as maternity or sick pay, holiday cover, or the cost of benefits in kind and the Class 1A National Insurance on them.
To see the same salary from the employee's side, use the salary calculator. For help running the payroll itself, see our payroll service or our business advisory support on planning a growing team.
Rates and assumptions
What this calculator uses
- Tax year shown
- 2026/27
- Geographical scope
- England, Wales and Northern Ireland
- Rates last reviewed
- 19 September 2026
- Source of rates
- HMRC / GOV.UK
Official guidance
- Rates and thresholds for employers (GOV.UK)
- National Insurance category letters (GOV.UK)
- Employment Allowance (GOV.UK)
- Automatic enrolment contribution levels (The Pensions Regulator)
These calculations are estimates based on the information entered and the tax rates and assumptions shown. They are intended as a general guide and do not constitute tax advice. Your actual tax position may differ depending on your circumstances, reliefs, other income and applicable tax rules.
Questions
Common questions
Because the employer also pays National Insurance on earnings above the secondary threshold, and usually a pension contribution under automatic enrolment. Equipment, software, insurance, training and recruitment costs sit on top of that again.
Need help with payroll?
We run payroll, auto-enrolment and RTI submissions for employers across Scunthorpe and North Lincolnshire, so pay days and HMRC deadlines take care of themselves.
Related services
Services that work alongside this
- Explore payroll
Fully managed payroll with RTI filing, pension auto enrolment and payslips delivered on schedule, every period.
- Explore business advisory
Practical commercial support: forecasting, funding, pricing, growth planning and preparing a business for sale or succession.