The true cost of a hire: salary plus employer National Insurance, the employer pension contribution on qualifying earnings and the Apprenticeship Levy.
Hiring at £45,000 costs £52,162.80 a year. Employer National Insurance adds £6,000 and the employer pension contribution adds £1,162.80, which is 15.92% on top of the salary before anything else. This is a planning estimate from published employer rates, not payroll and not employment advice.
Enter the salary you would offer. The on-costs are what the employer owes on top of it.
Hiring at £45,000 costs £52,162.80 — the on-costs add £7,162.80, or 15.92% on top of the salary.
The pension figure is 3% of qualifying earnings, the band between £6,240 and £50,270 — not of the whole salary. Above that ceiling the employer contribution stops rising.
2026/27 rates, England, Wales and Northern Ireland, no student loan. Open the full calculator to change region, student loan or pension method.
Payslip showing different figures? The payslip checker works out what your pay and tax code should have produced and shows which assumption could explain the gap.
| Tax/source year | 2026/27 |
|---|---|
| Region | England/Wales/Northern Ireland |
| Tax code basis | 1257L where the page uses PAYE defaults |
| Pension basis | No pension deduction unless this example says otherwise |
| Student loan basis | No student loan unless selected in this example |
| What is not decided here | PayBreakdown does not decide payroll correctness, lender approval, benefit entitlement or employer compliance, and does not give regulated financial, mortgage, debt, tax, payroll or legal advice. |
|---|
The figures on this page are worked from employer cost, using the values below. Open the calculator if your example salary differs.
Three things sit on top of a salary, and only the first is widely known.
Employer National Insurance is charged on pay above the secondary threshold, at a rate the employer pays and the employee never sees on a payslip. The employer's auto-enrolment pension contribution is charged on qualifying earnings. The Apprenticeship Levy applies only where the employer's annual pay bill has used up its allowance, which most small employers never reach.
Together they turn £45,000 into £52,162.80 — an extra 15.92%, before recruitment fees, equipment, software, insurance or space, none of which this page estimates.
The employer pension contribution is a percentage of qualifying earnings — the slice of pay between £6,240 and £50,270 — not of the whole salary.
This matters more as the salary rises. Below the floor nothing qualifies. Above the ceiling the band stops growing, so the employer contribution is the same at a high salary as it is at the ceiling, and the percentage on-cost falls.
A calculator that applies the rate to gross pay overstates the employer's cost at every salary above the floor, and by a wide margin at the top.
This is the payroll cost of employing someone, and it is the part that can be calculated from published rates. It is not the cost of hiring.
Recruitment fees, equipment, software licences, employers' liability insurance, workspace, training and the time of the people doing the interviewing are all real and none of them are here. Nor is statutory sick pay, parental pay, or the cost of cover when someone is away.
Use the figure as a floor, not a budget.
This estimate is worked out on £45,000 annual gross. Change any of those and the take-home figure moves; pension method and student loan plan usually move it most. A payslip can differ from any calculator because payroll works pay period by pay period, so a tax-code change, a bonus, arrears or a refund can land in one month and not the next. See how each deduction is worked out.
On £45,000, about £52,162.80 a year in payroll cost — 15.92% on top of the salary, before recruitment, equipment or space.
It is charged on pay above the secondary threshold. On £45,000 that is £6,000 a year, and the employee never sees it on their payslip.
No. It is a percentage of qualifying earnings, the band between £6,240 and £50,270. On this salary that gives £1,162.80.
Only where the annual pay bill has used up the levy allowance. Most small employers never reach it, so it is off by default here and can be switched on.
No. It is a planning estimate from published employer rates. Payroll software, an accountant or an employment adviser is the right place for a figure you will act on.
Last updated 2026-08-27. Checked by Sean Elsmore. Rates last checked against GOV.UK on 2026-08-07. Estimates are for planning and should be checked against official records where the decision matters.