Loaded employee cost & on-costs
What a hire actually costs in bluprnts — salary plus employer's NIC, pension and bonus — and why the loaded cost is the figure to plan against.
A salary is not what an employee costs. The loaded cost is salary plus the employer costs that come with it, and it is the figure that reaches your profit and loss and your bank account.
What bluprnts adds to a salary#
| On-cost | Where it's set | Default |
|---|---|---|
| Employer's NIC | Company-wide, in Tax under Company options; overridable per role | 15% |
| Pension contribution | Per role | 5% |
| Bonus | Per role, paid in a nominated month | 0 |
So a £40,000 salary on the defaults costs roughly £48,000 a year before any bonus — about 20% more than the number in the offer letter.
Why it's worth being deliberate about#
Hiring is usually the largest single decision in a founder's forecast, and it is consistently under-modelled — you plan against the salary, the on-costs arrive anyway, and the runway is shorter than it looked.
Two more reasons the loaded cost is the honest number:
- It lands from the start date, not the offer date. A role's cost begins when it begins, and a hire brought forward two months costs two months more.
- A planned role costs the same as a hired one. Intent is a commitment in the forecast. See Modelling states.
Where the cost lands#
Payroll and its on-costs sit in operating expenses on the profit and loss, and in paid to suppliers and employees on the cash flow statement. The department a role belongs to is what decides whether its salary is treated as a direct cost or an overhead.
Headcount and waves#
A role carries a number of employees, so one record can represent several heads at the same salary — and a ramp of hiring waves, so they don't all have to start at once. Both multiply the loaded cost.
See Employee fields.
Testing it#
The average salary and headcount levers on a scenario move the whole payroll at once, including on-costs. "What if we pay 10% more to hire faster?" is one lever and a complete answer. See Edit a scenario's assumptions.
Related#
- Add or edit an employee — the walkthrough.
- Corporation tax, NIC & duty — the company-wide NIC rate.
- Employee fields — every field.