Free tool
What a hire really costs
A salary is not what an employee costs. Add employer national insurance and pension and the real figure is typically 15% to 20% higher. Enter a salary and this calculator returns the fully loaded annual and monthly cost, and the extra revenue you need at your margin to cover it. Free, no sign-up, nothing you type leaves your browser.
Fully loaded cost
£52,350/year
£4,363 a month
- Gross salary
- £45,000
- Employer NI
- £6,000
- Employer pension
- £1,350
- On top of salary
- 16.3%
Needs about £87,250 of extra revenue a year to cover itself at a 60% gross margin.
Before you budget this: the Employment Allowance
Most UK employers can reduce their employer national insurance bill by up to£10,500 a year through the Employment Allowance. If your total employer national insurance across all staff comes to less than that, you may pay none at all, and the NI line above would be zero rather than £6,000.
It is claimed through your payroll software rather than applied automatically, and there is one exclusion that catches small companies: you cannot claim it if the only person paid above the secondary threshold is a single company director. You need at least one other employee or director paid above the threshold.
We have left it out of the calculation deliberately, because whether it applies depends on your whole payroll rather than on this one role. Treat the figure above as the cost before any allowance, and check with your accountant what you actually pay.
What this number leaves out
Salary, national insurance and pension are the costs you can calculate. They are not all the costs there are, and for a first hire the ones below can rival them.
Getting them through the door
Recruiter fees commonly run to 15% to 25% of first-year salary. Even hiring direct costs advertising and a serious amount of your own time.
Equipment and software
A laptop, a phone, a desk, and a seat on every tool your team uses. Per-seat software adds up quietly and recurs forever.
Space
If you have an office, each person carries a share of the rent, rates and utilities that never appears on their payslip.
The ramp
Almost nobody is productive in month one. Somebody has to train them, and that somebody is usually your most productive person.
Everything conditional
Bonus, commission, benefits, training budget, apprenticeship levy if you are large enough. Each is small and none is zero.
The Employment Allowance, in the other direction
The one item that can push the figure down rather than up. See above; for a small employer it can remove the national insurance line entirely.
The real question is when, not how much
A cost figure is useful and it is not the decision. Nobody actually asks "what does this person cost". They ask "can we afford them", and those are different questions with different answers.
Affordability depends on timing. A hire starting in March is a cost from March, while the revenue they help produce arrives later and gets collected later still. A hire that looks comfortable across a year can create a specific month where you cannot cover payroll, and an annual cost figure will never show you that month.
bluprnts answers it by putting the hire on the timeline. You add the role from the month it would actually start, with national insurance and pension added automatically, and the forecast recalculates: your cash path, your lowest point, your runway and the month you break even. Then you compare it against your plan without the hire, side by side, and look at the row that decides it, which is almost never profit. It is the lowest cash point.
| This calculator | A forecast in bluprnts |
|---|---|
| An annual and monthly cost | The cost on the month it actually starts |
| One role in isolation | Every role on one timeline, including hiring waves |
| Revenue needed, assuming it arrives | Revenue on the month it is collected, not invoiced |
| Says nothing about cash | The lowest cash point, with and without the hire |
| Re-type it to test a different start date | Move the start month and watch everything follow |
Questions about the cost of hiring
- How much does an employee really cost on top of their salary?
- In the UK, budget roughly 15% to 20% on top of gross salary for employer national insurance and pension alone. On a £45,000 salary at 2026/27 rates that is about £6,000 of employer national insurance and £1,350 of pension, giving a total of around £52,350, an uplift of roughly 16%. Recruitment, equipment, software and workspace sit on top of that again.
- How is employer national insurance calculated?
- For the 2026/27 UK tax year, employers pay 15% on each employee’s earnings above a secondary threshold of £5,000 a year. So a £45,000 salary attracts 15% of £40,000, which is £6,000. Employees under 21 and apprentices under 25 attract no employer national insurance until £50,270.
- What is the Employment Allowance, and does it change this?
- Yes, potentially to zero. Employment Allowance lets eligible employers reduce their annual employer national insurance bill by up to £10,500 for 2026/27. If your total employer national insurance across all staff is below that, you may pay none at all. You cannot claim it if the only person paid above the secondary threshold is a single company director. It is claimed through payroll rather than applied automatically.
- How much extra revenue do I need to pay for a hire?
- Divide the fully loaded cost by your gross margin. A £52,350 total cost at a 60% gross margin needs about £87,250 of additional revenue a year to cover itself. At a 25% margin the same hire needs around £209,400. This is why margin, rather than salary, usually decides whether a business can afford to grow its team.
- Does this tell me whether I can afford the hire?
- No, and that is a different question. This gives you an annual and monthly cost. Affordability depends on when the person starts, when the revenue they help produce actually gets collected, and how much cash you hold in between. A hire that is comfortable over a year can still create a month you cannot cover, which is a question for a cash flow forecast rather than a cost calculation.
See the month the hire gets tight.
Put the role on the timeline and watch the cash follow.
Get started7-day free trial · no card