Employer cost in the United Kingdom
Employing someone in the United Kingdom adds 0 % – 15 % of gross in employer contributions — a range rather than a single rate, for the reason set out below. On a £40,000 salary that is £40,000 – £46,000 of total cost, salary included.
What makes up the rate
| Employer Class 1 National Insurance, above the secondary threshold | 15 % |
| Secondary threshold | £5 000 |
| Employment Allowance, deducted from the annual bill | £10 500 |
Worth knowing
The lowest employer cost in this table by a wide margin, and the range starts at zero for a real reason: the Employment Allowance wipes out the first £10,500 of an eligible employer's annual National Insurance bill, so a small firm can owe nothing at all. Above that, 15% applies to everything over a £5,000 secondary threshold — a low threshold, which is why the marginal rate bites early even though the headline is modest.
Important
A general overview, not payroll advice. Employer contributions depend on the salary, the contract, the headcount and often the trade — the range above is a bracket, not a quote. Read on 2026-09-03.