UK Employee Cost Calculator

As a UK business owner, understanding your total employment costs is crucial for effective financial planning. Our UK employee cost calculator estimates the cost of employing up to 5 staff members, helping you budget effectively. The three main employment expenses are:

Annual Salary
Employer’s National Insurance Contributions
Workplace Pension Contributions

Enter the annual salary for each employee below to calculate the individual and combined costs to your business. The calculations are based on national insurance rates applicable from April 2025.

Eligible employers receive an annual national insurance allowance of £10,500, which is automatically deducted from their national insurance liability by payroll software.

Employee Cost Calculator

Disclaimer: These calculations are based on rates applicable from April 2025. This calculator is for illustration purposes only. Please consult with a tax or payroll advisor for accurate calculations based on your specific circumstances.

Employee 1

Employee 2

Employee 3

Employee 4

Employee 5

The Maths Explained

It is helpful to understand the calculations behind employment costs. Here’s a brief explanation of how employer’s national insurance and workplace pension contributions are calculated.

Employer national insurance contributions

Employer national contributions (NI)of 15% (from April 2025) are payable on employee salaries over £5,000 a year or £416 a month. For example, for an employee earning £25,000 a year, employer NI contributions of 15% will be payable on £20,000 (£25,000 – £5,000) which is £3,000 a year or £250 a month.

To learn more about the impact of the changes to employer national insurance rates from April 2025, take a look at our article on our sister site:

Employer National Insurance from April 2025 – Moneyquids

Workplace pension contributions

Employers must enrol eligible employees in a workplace pension and contribute a minimum of 3% of employee annual earnings between £6,240 and £50,270. In the above example, 3% is payable on £18,760 (£25,000 – £6,240) which is £563 annually or £47 a month.

Eligible employees are those aged between 22 and state pension age earning over £10,000 a year. Employees earning below this threshold can request to join a workplace pension scheme and their employer must make contributions on their earnings above £6,240.

Our partner website, MONEYQUIDS.CO.UK, has a useful staff budgeting spreadsheet available in their shop:

Employee budget