Employer Payroll Cost (UK)
Compute total employer payroll cost: secondary NIC (15%), Employment Allowance, auto-enrolment pension and Apprenticeship Levy.
Data verified · May 2026
How much does an employee really cost beyond their gross salary?
Add employer secondary Class 1 NIC at 15% on earnings above £5,000, auto-enrolment pension contributions on qualifying earnings between £6,240 and £50,270 (3% employer minimum by default), and for large employers the 0.5% Apprenticeship Levy. The calculator totals these on-costs and shows the fully-loaded payroll cost.
Source: HMRC; Pensions Act 2008; Apprenticeship Levy guidance. · updated 2026
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Everything about Employer Payroll Cost (UK)
📋Overview+
Calculates the fully-loaded UK employer payroll cost for 2025/26: employer secondary Class 1 NIC at 15% above £5,000, the Employment Allowance offset, auto-enrolment pension on qualifying earnings and the 0.5% Apprenticeship Levy for large employers.
💡 Best practices
- Single-director companies with no other staff cannot claim the Employment Allowance.
- The Apprenticeship Levy only applies to paybills above £3m.
📖User guide+
How to use this calculator
- 1
Enter the gross salary and number of employees.
- 2
Flag Employment Allowance eligibility.
- 3
Set the employer pension rate (default 3%).
- 4
Read the total payroll cost and on-cost ratio.
📚Glossary+
- Employment Allowance
- Up to £10,500/employer/year offsetting employer NIC.
- Qualifying earnings
- Auto-enrolment pension band £6,240–£50,270.
ℹ️Sources & updates+
Last data update
May 21, 2026
Sources and references
HMRC; Pensions Act 2008; Apprenticeship Levy guidance.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
FAQ — Employer Payroll Cost (UK)
How much does an employee really cost beyond their gross salary?+
Add employer secondary Class 1 NIC at 15% on earnings above £5,000, auto-enrolment pension contributions on qualifying earnings between £6,240 and £50,270 (3% employer minimum by default), and for large employers the 0.5% Apprenticeship Levy. The calculator totals these on-costs and shows the fully-loaded payroll cost.
Can my company claim the Employment Allowance?+
Eligible employers can offset up to £10,500 a year against their employer NIC bill. A notable exception: single-director companies with no other staff cannot claim it, so a solo director pays employer NIC in full.
Does the Apprenticeship Levy affect a small business?+
Usually not: the levy only bites once the annual pay bill exceeds £3m. Enter your total paybill in the optional field and the calculator will include the 0.5% charge only where it actually applies.