Employee cost calculator: what a UK hire really costs
A full-time employee on the National Living Wage costs a UK employer about £30,258 a year, or £16.30 for every hour they actually work; £19.00 in year one.
Work it out for your hours
A full-time week is 40 hours. Enter anything from a short part-time week to a long full-time week.
Someone working 40 hours a week costs a UK employer about £30,258 a year, or £16.30 for every hour they actually work; £19.00 in year one.
In the first year the total is £35,258, with recruitment, equipment and training.
In the first year, recruitment, equipment and training are a fixed amount, so they weigh more on fewer hours.
The cost for every hour changes a little with the hours, because National Insurance and pension are worked out on the whole year’s pay.
National Living Wage, 2026/27 figures. Last checked: 16 October 2026. Updated every April.
The worked table
| Input | Value | Source |
|---|---|---|
| Pay for each hour | £12.71 | National Living Wage, the adult rate, from 1 April 2026 |
| Employer National Insurance | 15% on pay above £5,000 a year | UK government rate, 2026/27 |
| Employer pension | 3% of qualifying earnings, between £6,240 and £50,270 a year | Minimum employer contribution, 2026/27 |
| Paid holiday | 28 days (5.6 weeks) a year | Statutory minimum for a full-time worker |
| A full-time week | 40 hours a week, 52 weeks a year | The week used in the worked example |
| Recruitment, year one | £2,500 | Our assumption |
| Equipment, year one | £1,500 | Our assumption |
| Training, year one | £1,000 | Our assumption |
| Year-one costs in total | £5,000 | The three lines above added together |
| Item | National Living Wage |
|---|---|
| Pay (40 hours a week, 52 weeks) | £26,437 |
| Employer National Insurance | £3,216 |
| Employer pension | £606 |
| Ongoing yearly cost | £30,258 |
| Hours actually worked (46.4 weeks after holiday) | 1,856 hours |
| Real cost for every hour worked | £16.30 |
| Year one, with recruitment, equipment and training | £35,258, or £19.00 for every hour worked |
Each pound figure is rounded to the nearest pound, and each cost for every hour to the nearest penny. The total is worked out before rounding, so the lines can differ from it by a pound.
What the figures leave out
- A small employer that claims the Employment Allowance pays less National Insurance, so their figure is lower.
- London pay is usually higher, so a London hire costs more.
When hiring is the better answer
The work has to be done in person.
Our team is fully remote, so a front desk, a shop floor or a site needs someone there.
The work cannot be reduced to rules or written steps.
We write your playbook with you in the first week: the FAQ, decision trees and escalation rules. We work from those, so work that is judgement from start to finish is better done by someone beside you.
If you do hire, the worked table above is what to budget for.