True cost of an employee
What an employee really costs you in 2026/27: their salary, employer National Insurance at 15% above £5,000.00, the minimum workplace pension, and cover for their holiday and sick days if you pay for it.
The figures used
For 2026/27, checked against GOV.UK.
- Employer National Insurance
- 15% above £5,000.00
Source: Rates and thresholds for employers 2026 to 2027, GOV.UK (opens in a new tab), checked 2 Nov 2026
- Minimum employer pension
- 3% of £6,240.00 to £50,270.00
Source: Review of the automatic enrolment earnings trigger and qualifying earnings band for 2026/2... (opens in a new tab), checked 2 Nov 2026
- Employment Allowance
- Up to £10,500.00 a year
Source: Rates and thresholds for employers 2026 to 2027, GOV.UK (opens in a new tab), checked 2 Nov 2026
Holiday is the statutory 5.6 weeks of their working days, at most 28, as in our holiday entitlement calculator. It leaves out what isn’t set by law, such as recruitment, equipment and training, and the Apprenticeship Levy, which only employers with a pay bill over £3 million pay.
This calculator gives the legal minimum as guidance, not legal advice. For one person’s situation, check their contract, or ask Acas (0300 123 1100, free) or a solicitor.
Keep the people you hire
KivoHR runs hiring from the request to the offer, works out holiday and sickness as they happen, and sends payroll the days and rates each period, so the cost you planned is the cost you pay.
True cost questions.
How much does an employee cost on top of their salary?
For most people, employer National Insurance at 15% of pay above £5,000.00 a year, and a workplace pension of at least 3% of their qualifying earnings. If you pay someone to cover their holiday and sick days, that adds more.
Who pays no employer National Insurance?
For under-21s and apprentices under 25, you pay none on earnings up to £50,270.00 a year, and 15% above it.
What is the Employment Allowance?
Most employers can take up to £10,500.00 a year off their employer National Insurance, across all their staff. A company whose only employee is a director can’t claim it.
Who must I put in a pension?
Anyone aged 22 to State Pension age who earns more than £10,000.00 a year with you. You pay at least 3% of their earnings between £6,240.00 and £50,270.00.
Why add cover for holiday?
Holiday is paid, so it is already in the salary. If you pay someone else to do the work while they are away, as many shops, care homes and restaurants do, that cover is an extra cost.
Do it automatically in KivoHR.
14 days free, no card needed.