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Free tool · 2026/27 tax year

Salary calculator

Type a figure in any box and the rest fill in: what they earn, what they take home, and the row nobody else shows you, what the hire actually costs.

Rates checked 18 August 2026

HourDayWeekMonthYear
Gross pay
They take home
It costs you

Why the bottom row is bigger than the top one. On top of gross pay you pay employer National Insurance at 15 per cent of everything above £5,000 a year, plus your pension contribution. The Employment Allowance lets most small employers offset the first £10,500 of employer NI each year, so across a small team the real cost sits between the two figures. A company whose only employee is its director cannot claim it.

What this assumes, stated plainly

Standard tax code (1257L), England, Wales or Northern Ireland: Scotland has six different bands. Tax and NI are worked out annually and divided back down, which is how salary calculators normally do it and is a close approximation to payroll. The employee pension is treated as reducing taxable pay but not NI, which matches most workplace schemes; salary sacrifice arrangements save NI too and come out slightly better. Student loan deductions are not included. Fifty two weeks and twelve months to the year.

Why the cost of a hire is not the salary

Employer National Insurance runs at 15 per cent of everything above £5,000 a year, and pension contributions sit on top of that. On a £30,000 hire that is roughly £3,750 in National Insurance before pension, which is the gap between what you budgeted and what leaves the bank.

The Employment Allowance offsets the first £10,500 of employer National Insurance each year for most small employers, which for a small team can wipe out the whole bill. It is not available to a company where a sole director is the only employee, which catches a lot of one-person limited companies.

Hourly, salaried, and the point where they diverge

Converting a salary to an hourly rate is arithmetic until overtime, shift premiums and holiday get involved. A salaried employee working consistent overtime has an effective hourly rate below the headline, and where that dips under the minimum wage it becomes an HMRC problem rather than a morale one. Holiday pay for anyone with regular overtime or shift premiums has to reflect that normal pay rather than basic pay alone.

What the take home figure does not show

Student loan repayments, salary sacrifice arrangements, and the personal allowance taper above £100,000 all change the net figure and none of them are in the calculation above. Treat the take home number as a good estimate for a conversation, not as a payslip.

Common questions

How much does an employee actually cost an employer?

Gross salary plus employer National Insurance at 15 per cent of earnings above £5,000 a year, plus employer pension contributions. The Employment Allowance can offset the first £10,500 of the National Insurance for eligible employers.

What is the Employment Allowance?

A relief that offsets up to £10,500 of employer National Insurance each tax year. It is not available to companies where a sole director is the only employee.

Does overtime have to be included in holiday pay?

Where overtime is regular enough to count as normal pay, yes. Holiday pay based on basic pay alone is a common source of underpayment claims.

What are the National Insurance thresholds for employees?

Employees pay 8 per cent on earnings between £12,570 and £50,270 and 2 per cent above that.

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