Employer Cost Calculator
Auto-enrolment minimum: 3% of qualifying earnings (£6,240–£50,270)
Health insurance, company car, training, etc.
Total Cost to Company
£34,463
£2,872/month
Per Day
£132.55
Per Hour
£17.67
Cost Breakdown
| Period | Gross Salary | Employer Costs | Total Cost |
|---|---|---|---|
| Annual | £30,000 | +£4,463 | £34,463 |
| Monthly | £2,500 | +£372 | £2,872 |
| Daily | £115.38 | +£17.16 | £132.55 |
| Hourly | £15.38 | +£2.29 | £17.67 |
💡 Hiring Tip
When budgeting for a new hire, add 14.9% to their gross salary. A £30,000 salary actually costs your business £34,463. This is important when comparing against contractor day rates.
1. Gross Salary: Enter the employee's annual gross salary (before any deductions).
2. Employer Pension: Enter the employer contribution percentage. The legal minimum is 3% of qualifying earnings for auto-enrolment.
3. Options: Toggle the Apprenticeship Levy (large employers with pay bill over £3m) and Employment Allowance (reduces employer NI by up to £10,500).
4. Additional Benefits: Add the cost of any other benefits (health insurance, company car, etc.) to see the full picture.
Understanding Employer Costs in 2025/26
When you hire someone at a £30,000 salary, the actual cost to your business is significantly higher. From April 2025, employer NI increased to 15% (from 13.8%) and the threshold dropped to £5,000 (from £9,100). This means:
- Employer NI: 15% on all earnings above £5,000 — for a £30,000 salary, that's £3,750/year
- Employer Pension: Minimum 3% of qualifying earnings — typically £713/year
- Apprenticeship Levy: 0.5% for large employers (pay bill > £3m) — £150/year
The April 2025 NI Increase
The combined effect of the rate increase (13.8% → 15%) and threshold reduction (£9,100 → £5,000) means employers pay significantly more. For a £30,000 employee, the increase is approximately £1,063/year extra in employer NI compared to 2024/25.
Employer Cost Reference Table
| Salary | Employer NI | Pension (3%) | Total Cost | Overhead |
|---|---|---|---|---|
| £25,000 | £3,000 | £563 | £28,563 | +14.3% |
| £30,000 | £3,750 | £713 | £34,463 | +14.9% |
| £40,000 | £5,250 | £1,013 | £46,263 | +15.7% |
| £50,000 | £6,750 | £1,321 | £58,071 | +16.1% |
| £60,000 | £8,250 | £1,321 | £69,571 | +15.9% |
| £80,000 | £11,250 | £1,321 | £92,571 | +15.7% |
| £100,000 | £14,250 | £1,321 | £115,571 | +15.6% |
Based on 3% employer pension on qualifying earnings, no Employment Allowance, no Apprenticeship Levy.
Employee vs Contractor: Cost Comparison
When deciding between hiring an employee or engaging a contractor, compare the total cost — not just the headline salary vs day rate.
Employee (£30k salary)
- Total cost: ~£34,500/year
- = £133/working day
- + Holiday pay (28 days)
- + Sick pay, mat/pat leave
- + Employment rights
- + Loyalty & training
Contractor (£200/day)
- Total cost: ~£52,000/year
- = £200/working day
- No holiday/sick pay
- No employer NI or pension
- Flexible engagement
- IR35 risk to manage
2025/26 Employer Rates
- Employer NI Rate
- 15%
- NI Threshold
- £5,000/yr
- Employment Allowance
- £10,500
- Min Pension (employer)
- 3%
- Apprenticeship Levy
- 0.5%
- Levy Threshold
- £3m pay bill
Related Tools
Common Questions
Can I claim Employment Allowance?
Most businesses and charities can. You cannot claim if you're a sole director with no other employees, or if more than half your work is for public bodies.
Is employer pension tax deductible?
Yes. Employer pension contributions are an allowable business expense, reducing your Corporation Tax bill. They're also exempt from employer NI.
What about benefits in kind?
Benefits like company cars, health insurance, and gym memberships are also subject to employer NI (Class 1A at 15%). Include these in "Additional Benefits" for a complete picture.