Cost of hiring an employee calculator 2026/27
What a new employee really costs your company, on top of their salary: employer National Insurance, the Employment Allowance and pension contributions, with every step of the working shown.
More info
The employee's gross pay for the year, including any bonus. Their own Income Tax and National Insurance come out of this salary, so they are not an extra cost to you.
More info
Add their start date to also see the cost for the rest of this tax year, from that date to 5 April 2027. It assumes they are paid monthly, with the first month paid for the days they work. National Insurance and pension are worked out month by month, using HMRC's monthly thresholds, as payroll does.
More info
The Employment Allowance takes up to £10,500 a year off your company's employer National Insurance bill. Most employers can claim it, but not a company whose only employee paid above £5,000 a year is a director, and connected companies can only claim one allowance between them. If your existing staff already use it up, choose "None left".
More info
Staff earning over £10,000 a year must be automatically enrolled into a workplace pension. The minimum employer contribution is 3% of "qualifying earnings": the part of the salary between £6,240 and £50,270. Many employers pay more, or pay a percentage of the whole salary.
Tailor it to you: Corporation Tax relief
More info
Salary, employer National Insurance and pension contributions are all business costs, so they reduce your company's Corporation Tax. 26.5% is the effective rate on each extra pound of profit between £50,000 and £250,000.
Assumptions (4)
- 2026/27 rates: employer National Insurance of 15% on pay above £5,000 a year; Employment Allowance up to £10,500; automatic enrolment on pay above £10,000, with qualifying earnings between £6,240 and £50,270.
- A full year's employment. For someone joining part-way through the year, the costs are lower in the first year.
- Not included: recruitment, equipment, training and other running costs. The Apprenticeship Levy only applies to employers with a pay bill over £3 million.
- Figures are worked to the penny: each amount is rounded to the nearest penny as it is calculated, and every later figure is built from those amounts, so every line adds up exactly.
| Pay period | Pay | Employer NI | Pension |
|---|
Show the workings
Check it with HMRC
These figures follow HMRC's published rules and rates. To read them in full, or to check a figure:
- National Insurance and payroll thresholds: Rates and thresholds for employers 2026 to 2027
- Employment Allowance: Employment Allowance
Calculated at sjecapital.co.uk/cost-of-hiring-calculator. 2026/27 rates. Illustrative, not advice. SJE Capital Limited, company no. 15837169.
Spotted something that looks wrong? Tell us and we will check it straight away.