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Employee cost calculator for small businesses
The salary is only the start. Add employer taxes, pension and the costs of putting someone on the road to see what an hour of their time really costs.
An employee costs more than their salary. For 2026/27 add employer National Insurance at 15% on pay above £5,000 a year, at least 3% pension on qualifying earnings, 5.6 weeks' paid holiday, and equipment and training.
Hours straight onto the invoice
Your team logs hours in Sam, and billable time becomes an invoice in one click.
Start freeHow it works
For 2026/27, employer National Insurance is 15% of pay above £5,000 a year. Auto-enrolment pension is a percentage of qualifying earnings between £6,240 and £50,270. The hourly cost divides the year's cost by the hours worked after 5.6 weeks of paid holiday.
Worked example
A £32,000 salary adds £4,823 of employer NI and pension, plus £4,500 of running costs: £41,323 a year, or £22.26 for every hour worked.
Many small employers can claim the Employment Allowance, which reduces the employer NI bill. It is left out here; check if you qualify.
Questions
Why is the hourly cost so much higher than the hourly wage?
Because you pay for holidays and taxes, and the costs of tools, vehicle and training, but only bill for the hours worked.
How do I use this when pricing?
Charge more per billable hour than the cost per hour worked: not every hour worked is billable. The day rate calculator helps.
What should go in other costs?
Van, fuel, tools, PPE, training, phone, software seats and employer's liability insurance.
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