Cost of Hiring Calculator
See the true total employer cost of taking on a new employee in 2025/26
Common Questions
What is the true cost of hiring?
The true cost goes well beyond the salary on the offer letter. For a £35,000 employee, an employer typically pays: £35,000 salary + ~£4,500 employer NI + £855 pension (3% on qualifying earnings) + recruitment fees + equipment + training + management time during onboarding. The total first-year cost can easily reach 1.3–1.5× the base salary.
How has employer NI changed in 2025/26?
Two significant changes took effect from 6 April 2025: (1) the employer NI rate increased from 13.8% to 15%, and (2) the Secondary Threshold (the point at which employer NI kicks in) was reduced from £9,100 to £5,000 per year. This substantially increased the NI cost for most employers. To partially offset this, the Employment Allowance was raised from £5,000 to £10,500 per year.
What other costs should I budget for?
Other costs to consider include: employer's liability insurance (legally required), health and safety compliance, payroll processing costs, any enhanced pay schemes (enhanced sick pay, parental pay), performance-related pay, professional memberships or subscriptions, uniform or PPE, office space, HR support for managing the employment relationship, and potential redundancy or dismissal costs if the hire doesn't work out. The full picture is significantly larger than the salary alone.
Enter the salary and costs to calculate the total employer investment.
2025/26 Employer Costs
- Employer NI rate: 15%
- NI secondary threshold: £5,000/yr
- Min employer pension: 3%
- Employment Allowance: £10,500
- Auto-enrolment trigger: £10,000/yr
Related Calculators
What's included in this calculator
Includes the new 15% rate and £5,000 threshold.
Automatically applies the £10,500 small business relief.
Factors in the 3% mandatory employer auto-enrolment.
Models equipment, software, and office space costs.
Includes one-off agency or advertising expenses.
Allocates costs for onboarding and professional development.
The True Cost of Employment in the UK
When a business advertises a £35,000 role, the true cost to the employer is considerably higher. Employer National Insurance contributions, pension payments, and recruitment fees alone can add 20–30% above the salary figure. From April 2025, the employer NI rate rose to 15% on all earnings above £5,000 per year — the highest rate since 1984 — making workforce cost modelling more important than ever for UK businesses of all sizes.
Pension auto-enrolment adds a minimum of 3% of qualifying earnings on top of salary. On a £35,000 salary, qualifying earnings are approximately £28,760 (after subtracting the lower limit of £6,240), so the minimum employer pension contribution is around £863 per year. Employers who offer above-minimum pension contributions — as many do to attract talent — will see this cost rise further.
The Employment Allowance, raised to £10,500 for 2025/26, provides meaningful relief for small and medium businesses. An eligible employer with a small team can offset a significant portion of their employer NI liability. However, larger employers and single-director companies cannot claim the allowance, and the NI changes from April 2025 have effectively increased their employment costs substantially regardless.