What employer NI rate does the calculator use for 2026/27?

The default input is 15%, applied to salary above the £5,000 annual Secondary Threshold. Some employees, reliefs and NI category letters are treated differently, so verify the rate that applies to your payroll.

How does a National Minimum Wage increase affect total employment costs?

When the National Living Wage rises, employer costs increase by more than the wage uplift alone. Higher gross pay means additional National Insurance above the secondary threshold, and the employer pension contribution also rises as it is based on qualifying earnings. For a small business with several low-paid staff, a 10% wage increase can push total costs up by 12–15%. The employee cost calculator lets you model different salary levels to plan accurately before each April uplift.

Employee Cost Calculator UK

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Rates and sources, 2026/27

Illustrative employer cost using the Category A employer National Insurance rate and secondary threshold for 2026/27. It does not model Employment Allowance, category-specific reliefs, benefits or payroll timing.

Rates used for 2026/27
Band or figure	Rate
Employer NI rate	15%
Secondary threshold	£5,000 a year
Employment Allowance	not modelled

Source: HMRC — 2026/27 employer rates and thresholds. Source checked for 2026/27.

When to use this calculator

Before pricing a job, setting margin targets or reviewing hiring costs.
When you want to test sensitivity around volume, tax, markup or overheads.
When you need a practical estimate before committing to a budget or proposal.
When you are modelling break-even volume as costs or prices change.

A worked example

These are the example figures the calculator opens with.

A worked example
Input	Value
Annual Salary (£)	£30,000
Employer NI Rate (%)	15%
Employer Pension (%)	3%
Other Annual Benefits (£)	£500

For those figures the calculator returns:

Employer NI: £3,750.00
Pension: £900.00
Total cost: £35,150.00
On-cost: 17.17%

Method & assumptions

This calculator estimates the annual cost of employing one member of staff using the salary, employer National Insurance rate, pension percentage and other benefits you enter. Its employer NI estimate applies the entered rate to salary above the £5,000 annual Secondary Threshold used for 2026/27. The pension line applies your entered percentage to the full salary, so it is a planning assumption rather than an automatic-enrolment compliance calculation.

The result does not apply Employment Allowance, NI category-letter exceptions, qualifying-earnings pension bands, recruitment costs, equipment or other payroll adjustments. Check your payroll setup and the current GOV.UK employer rates before making a hiring or budget decision.

Common mistakes

Using optimistic assumptions without testing a more cautious scenario.
Using revenue in place of gross profit when calculating margin.
Treating the result as a final quote instead of a planning estimate.
Forgetting employer on-costs when modelling the true cost of a hire.

What to do next

Try at least one more scenario so you can compare a realistic range.
Use the related calculators below to cross-check the decision from another angle.
Write down the key outputs from your best scenarios before you decide.
If the result surprises you, change one input at a time to isolate the driver.

Questions people ask

The total depends on salary, the employee's National Insurance category, pension basis and benefits. For 2026/27, the standard employer NI rate is 15% above the £5,000 annual Secondary Threshold, before reliefs or category-specific rules. Use the inputs to model your own pension and benefits assumptions.