The number on the offer letter is not the cost

What does this hire actually cost?

Salary is the part everybody knows. Employer National Insurance at 15%, the £10,500 Employment Allowance that most calculators quietly ignore, and the pension you're obliged to pay are the parts that decide whether the hire is affordable. All of it, worked out in the open, for 2026/27.

The hire

Gross annual salary

What you'd put on the contract.

NI category

Age and status change the employer bill, often by thousands.

Auto-enrolment pension

Enrolled

Employer minimum is 3% of qualifying earnings.

Employment Allowance

Eligible

Not available if your only employee paid above the secondary threshold is a director.

Allowance already used this year

Employer NI your existing staff have already absorbed. The £10,500 is one allowance for the whole business — not one each.

Tax year

2026 / 27

Employer NI 15% · secondary threshold £5,000 · allowance £10,500.

One free calculation per company. Company number and a work email, and you get the full picture — employer NI, the Employment Allowance, pension, and what the same salary costs under every NI category.

True cost to employ

—

a year

Employer NI

—

after allowance

On-cost

—

on top of salary

The working — how every figure is reached LIVE

The same salary, different NI category

Category	Employer NI	Pension	True cost	vs standard

How to read this. Employer (secondary) Class 1 NI is 15% of everything above the £5,000 secondary threshold. Categories M, H, V and Z pay nothing until the Upper Secondary Threshold of £50,270, then 15% above it — which is why a 20-year-old and a 30-year-old on the same salary can cost very different amounts. The Employment Allowance. Eligible employers reduce their total annual employer NI by up to £10,500 (source: gov.uk/claim-employment-allowance, 2026/27). It is one allowance per business (connected companies share it), not one per employee — so it is used up by your existing payroll before it reaches a new hire. A cost calculator that ignores it can overstate a hire by up to £10,500 a year. The £100k prior-year cap was removed in April 2025. Scope. Pension assumes the statutory 3% employer minimum on qualifying earnings (£6,240–£50,270). Excludes apprenticeship levy (employers over £3m paybill), salary sacrifice, benefits in kind, and the Class 1A on them. This is a calculation tool, not tax advice — edge cases go to a qualified accountant.

Now do it for everyone, every month.

One hire is arithmetic. A payroll is a deadline — RTI filed on or before payday, auto-enrolment assessed every period, payslips out, and the Employment Allowance tracked across the whole year so it runs out when it should and not before.

Run it yourself → We Switch Payroll Have someone run it → We Switch Payroll

Free either way: the calculators stay free and stay in your browser.

The other calculators

Take-home payTax, NI and student loan on a wage Holiday pay12.07%, 5.6 weeks, or the 52-week average Auto-enrolmentWho must be enrolled, and for how much Minimum wageAre you actually compliant? Statutory paySSP, SMP, SPP and the rest CIS deductions20%, 30% or gross