# Employee Cost Calculator: What a UK Hire Really Costs You a Year

> Enter a rate, weekly hours and National Insurance category to see what a UK hire costs in a year and per hour they actually work, with paid holiday, employer NI and pension included, and what adding one more hour a week would cost.

- Author: Alex Riesenkampff (Super44)
- Published: 2026-09-28 · Updated: 2026-10-08
- Canonical: https://super44.ai/blog/employer-cost-calculator-uk

## Key takeaways

- On 2026 to 2027 rates and per hour actually worked, a standard adult aged 22 or over and enrolled in a pension, on £12.71, costs £15.55 at 16 hours a week and £16.14 at 30 once 5.6 weeks of paid holiday, 15% employer National Insurance and a 3% pension are counted: 22% to 27% above the hourly rate.
- Adding an hour to every working week for someone already past the National Insurance and pension thresholds costs £16.81 per hour worked at £12.71, more than the average hour, because the extra hour gets no share of the weekly allowances.
- Two staff on 16 hours at £12.71 cost £936 a year less in National Insurance and pension than one person on 32, because each has their own £96 National Insurance and £120 pension allowance every week.
- A 23-year-old in the first year of an apprenticeship, paid the £8.00 apprentice rate for 35 hours, costs £14,810 a year: category H removes employer National Insurance up to £967 a week, but at that age and pay they must still be enrolled in a pension.
- Paying irregular-hours staff their holiday as 12.07% on every payslip costs about £101 a year more than paying it in the weeks they take off, for a standard adult enrolled in a pension, paid weekly and taking leave as whole weeks, because the weekly National Insurance and pension allowances go unused in unpaid leave weeks.

Enter a rate, the weekly hours and who the hire is. The calculator adds paid holiday, employer National Insurance and pension, and shows the result for a year and per hour the person actually works. Compare per hour worked against what that hour brings in. The last line shows what adding one more hour to every week would cost, which is usually more than the average.

**What does this hire cost, all in?** *(guided estimator in the web version)*

- **Hourly rate:** £13
- **Hours in a working week:** 30 h
- **National Insurance category:** Standard adult, 21+ (category A) — 15% employer NI above £96 a week.
  - Other choices: Under 21 (category M) / Apprentice under 25 (category H)
- **Workplace pension:** Enrolled — Automatic from 22 on over £192 a week; younger or lower-paid staff can opt in.
  - Other choices: Not enrolled

| Result | Example value |
| --- | --- |
| True cost for a year | £22,461 |
| Cost per hour worked | £16.14 |
| Cost of one more hour a week, per hour worked | £16.81 |
| Paid holiday (5.6 weeks), per year | £2,135 |
| Employer National Insurance, per year | £2,225 |
| Employer pension, per year | £408 |

*2026 to 2027 rates. Yearly figures to the nearest pound, hourly figures to the penny. A year is 52 paid weeks, 46.4 of them worked and 5.6 of them paid leave; per hour worked divides the year's cost by the hours in those 46.4 weeks. National Insurance: 15% above £96 a week for category A; for categories M and H, 0% up to £967 a week and 15% above it (GOV.UK rates and thresholds, 2026 to 2027). Pension: 3% of pay between £6,240 and £50,270 a year (The Pensions Regulator). Paying an irregular-hours worker 12.07% on every payslip instead of paying them in their leave weeks costs about £101 a year more for a standard adult enrolled in a pension, on weekly pay, who earns over £120 in the weeks they work and takes leave as whole weeks off. The one-more-hour line assumes the extra hour is regular, so it earns holiday like the rest.*

## Choosing the options

Most hires are standard adults on category A, with 15% employer National Insurance on weekly pay above £96. Staff under 21 (category M) and apprentices under 25 (category H) are the exception: no employer National Insurance until pay passes £967 a week, about £50,000 a year. A veteran in their first year of civilian work sits on category V, which works the same way, so pick the under-21 option for them.

For the pension, choose enrolled if they are 22 or over and earn more than £192 a week, because you have to enrol them. Choose it too for a younger or lower-paid worker who has opted in and earns over £6,240 a year, since you then pay the same 3%. Our article on [the real cost of an hour of staff in the UK](/blog/uk-employer-ni-true-hourly-cost) explains where each of these rules comes from and what the April 2025 National Insurance rise did to the sector.

There is no holiday option: fixed-hours or irregular, you pay for about 52 weeks and get about 46.4 weeks of work. Our [guide to holiday pay for irregular-hours staff](/blog/uk-holiday-pay-irregular-hours) covers when you can pay 12.07% on each payslip instead of paying in the leave weeks.

## Two hires, worked through

**A zero-hours bartender working 16 hours a week at £12.71 costs £11,542 a year, or £15.55 for every hour they are behind the bar.** The wage for the hours worked is £9,436. Holiday adds £1,139, employer National Insurance £837 and the pension £130, assuming they are 22 or over. If you pay their holiday as 12.07% on each payslip, the year comes to £11,643, because the weekly National Insurance and pension allowances go unused in the weeks they take off. That £101 is the price of the simpler payroll the holiday pay guide recommends.

**A 23-year-old in the first year of an apprenticeship can be paid £8.00 an hour, and on 35 hours costs £14,810 a year, or £9.12 per hour worked.** Category H takes employer National Insurance to zero. But at 23 and £280 a week they are well past the pension trigger, so you still owe £250 a year. Cost an apprentice at the wage alone and that £250 is what you miss.

## One more hour, or one more person

For anyone already past the weekly thresholds, the next hour costs more than the average one. The average shares out the week's National Insurance and pension allowances; an extra hour gets none of them. For the bartender, the average is £15.55 per hour worked and a 17th hour every week is £16.81: the wage, its share of holiday, then 15% National Insurance and 3% pension on the lot. For the apprentice it is £9.23, the wage and holiday plus 3% pension, because at £280 a week National Insurance never starts.

**Two bartenders on 16 hours each cost £23,084 a year; one bartender on 32 hours costs £24,020, or £936 more.** Each employee brings their own weekly allowances. That is under 4% of what the hours cost you, and if your venue claims the Employment Allowance the £749 National Insurance part may cost nothing in cash. Recruiting and training a second person has its own cost, which our [staff turnover calculator](/blog/cost-of-staff-turnover) helps you put a number on, and a good bartender who cannot get more hours may find them somewhere else.

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## What the calculator leaves out

- **The Employment Allowance.** Eligible employers can take up to £10,500 a year off their National Insurance bill. It is a credit against the whole payroll, so the calculator leaves it out of any one hire. Our [guide to the Employment Allowance](/blog/uk-employment-allowance-hospitality) covers who can claim.
- **Freeport and Investment Zone categories**, which have their own rules. Check GOV.UK's category list if either applies.
- **Very short weeks.** Below £96 a week there is no employer National Insurance at all, which the calculator handles, but pay that swings week to week can cross the thresholds unevenly.
- **Second jobs.** Each employer works out National Insurance and pension separately, against the full thresholds.
- **Tips.** Nothing in the calculator is tips, and that is the point: card tips paid out through an independent tronc carry no employer National Insurance at all, while the same money run through payroll does. Our [guide to how tips are taxed](/blog/uk-tips-law-tronc-tax) works through what that is worth on a cafe's £600 week.

## FAQ

### How do I use the calculator for someone on a salary?

Divide the annual salary by 52, then by the contracted weekly hours, and enter that as the hourly rate. £28,000 for a 40-hour week comes out at £13.46 an hour. The yearly total then includes the salary itself, so the extra over £28,000 is the employer National Insurance and pension.

### Which National Insurance category should I pick?

Standard (category A) for anyone 21 or over who is not an apprentice under 25. Under 21 (category M) for anyone younger. Apprentice under 25 (category H) for apprentices up to their 25th birthday. A veteran in their first year of civilian work is on category V, which has the same 0% band up to £967 a week, so the under-21 option gives the right figures for them.

### Why does the calculator include holiday for everyone?

Every worker is entitled to 5.6 weeks of paid leave, and you pay for those weeks whether or not the person works them. A fixed-hours employee is paid through their leave, so you pay 52 weeks for 46.4 weeks of work. An irregular-hours worker can be paid 12.07% on top instead. Per hour worked the two come out almost the same, which is why the calculator shows cost per hour worked rather than per hour paid.

### Is it cheaper to give existing staff more hours or to hire someone?

On National Insurance and pension alone, hiring is cheaper, because each employee gets their own weekly allowances: two people on 16 hours at £12.71 cost £936 a year less than one on 32. That saving is small next to the cost of recruiting and training someone new, and staff who want more hours may leave if they cannot get them.

### Does the calculator include the Employment Allowance?

No. Eligible employers can take up to £10,500 a year off their total employer National Insurance bill, but it is a credit against the whole payroll rather than any one hire. If your venue claims it and has not used it up, a new hire's National Insurance may cost you nothing in cash this tax year.

## Sources

1. [GOV.UK: Rates and thresholds for employers 2026 to 2027](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027) — "Unless otherwise stated, the following figures apply from 6 April 2026 to 5 April 2027." Secondary Threshold "£96 per week / £417 per month / £5,000 per year". Upper Secondary Threshold "£967 per week" and "£50,270 per year". Employer Class 1 rate 15% for category A. Employment Allowance for 2026 to 2027 "£10,500". Lower Earnings Limit "£129 per week / £559 per month / £6,708 per year". Published 30 January 2026, last updated 1 September 2026. Checked 28 September 2026.
2. [GOV.UK: National Insurance rates and categories, category letters](https://www.gov.uk/national-insurance-rates-letters/category-letters) — Category A "All employees apart from those in groups B, C, H, J, M, V and Z in this table". Category M "Employees under 21". Category H "Apprentices under 25". Category V "Employees who are working in their first job since leaving the armed forces (veterans)". Category X "Employers use category letter X for employees who do not have to pay National Insurance, for example because they’re under 16." Checked 28 September 2026.
3. [GOV.UK: Employment Allowance](https://www.gov.uk/employment-allowance) — "Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to £10,500." Checked 28 September 2026.
4. [GOV.UK: Single-director companies and Employment Allowance, further employer guidance](https://www.gov.uk/government/publications/employment-allowance-more-detailed-guidance/single-director-companies-and-employment-allowance-further-employer-guidance) — "Limited companies cannot claim Employment Allowance if they have just one director and that director is the only employee liable for secondary Class 1 National Insurance." Updated 28 May 2026. Checked 28 September 2026.
5. [The Pensions Regulator: Earnings thresholds](https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/declare-your-compliance/ongoing-duties-for-employers/earnings-thresholds) — Earnings trigger £10,000 a year, £192 a week. Qualifying earnings band £6,240 to £50,270 a year, for the 2026 to 2027 tax year. Checked 28 September 2026.
6. [The Pensions Regulator: Work out who to put into a pension](https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/work-out-who-to-put-into-a-pension) — "Any staff who are: aged between 22 up to State Pension Age and earn over £10,000 per year, or £833 per month or, £192 per week...must be put into a pension scheme and you must both pay into it." Quote compiled from the page's heading and bulleted list rather than a single flowing sentence. Checked 28 September 2026.
7. [The Pensions Regulator: Opting in and joining](https://www.thepensionsregulator.gov.uk/en/business-advisers/automatic-enrolment-guide-for-business-advisers/opting-in-and-joining) — "Staff who can opt in are: aged 16-21, or state pension age to 74 earning above £10,000 a year or aged 16-74 earning above £6,240 up to and including £10,000 a year"; these staff are entitled to an employer contribution. "Staff who can join are: aged 16 to 74 earning £6,240 or less per year", for whom the employer does not have to contribute. Checked 28 September 2026.
8. [GOV.UK: Workplace pensions, what you, your employer and the government pay](https://www.gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay) — Minimum employer contribution "3%", minimum total contribution "8%", calculated on "total earnings between £6,240 and £50,270 a year before tax." Checked 28 September 2026.
9. [GOV.UK: National Minimum Wage and National Living Wage rates](https://www.gov.uk/national-minimum-wage-rates) — From 1 April 2026: 21 and over £12.71, 18 to 20 £10.85, under 18 £8.00, apprentice rate £8.00. The apprentice rate applies to apprentices aged under 19, or aged 19 or over and in the first year of their apprenticeship; an apprentice aged 19 or over who has completed their first year moves onto the age-based rate. Checked 28 September 2026.
10. [GOV.UK: Calculate holiday entitlement for irregular hours and part-year workers](https://www.gov.uk/holiday-entitlement-rights/calculate-leave-entitlement) — "Their entitlement will be 12.07% of the hours they worked in a pay period. It must be rounded up to the nearest hour if the entitlement is 0.5 of an hour or more." Worked example: "For example, if they worked 30 hours and are paid weekly, they’ll have earned 4 hours leave (30 × 12.07 ÷ 100 = 3.621)." Applies for leave years beginning on or after 1 April 2024. Checked 28 September 2026.
11. [GOV.UK: Holiday pay and entitlement reforms from 1 January 2024](https://www.gov.uk/government/publications/simplifying-holiday-entitlement-and-holiday-pay-calculations/holiday-pay-and-entitlement-reforms-from-1-january-2024) — "The 12.07% figure is based on the fact that all workers are entitled to 5.6 weeks’ leave. This means that a worker’s total working weeks in a year is 46.4 (52 weeks in a year minus 5.6 weeks of leave). 12.07% of 46.4 is 5.6." Last updated 1 April 2024. Checked 28 September 2026.
12. [ACAS: Holiday entitlement for irregular hours and part-year workers](https://www.acas.org.uk/irregular-hours-and-part-year-workers) — Describes the 12.07% accrual method for irregular-hours and part-year workers, introduced for leave years starting on or after 1 April 2024. Last updated 22 April 2026. Checked 28 September 2026.
13. [HMRC National Insurance Manual, NIM02200: holiday pay](https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim02200) — Confirms holiday pay is ordinary earnings for Class 1 NI purposes outside the now-defunct multi-employer holiday-pay-fund exception: "the usual rules will apply in respect of calculating NICs" on holiday pay. Checked 28 September 2026.