How much does a £45,000 employee cost? (2026-27)

A £45,000 employee costs the employer £52,162.8 per year in the 2026-27 tax year (with minimum 3% pension). This includes £6,000 in employer NI and £1,162.8 in pension contributions — 15.9% above the gross salary. The cost per hour is £26.75.

At a glance

An employee on a £45,000 gross salary costs your business significantly more than their headline pay:

3% pension	5% pension	8% pension
Employer NI	£6,000	£6,000	£6,000
Pension	£1,162.8	£1,938	£3,100.8
Total cost	£52,162.8	£52,938	£54,100.8
Above salary	15.9%	17.6%	20.2%
Cost per hour	£26.75	£27.15	£27.74

At £45,000, the full salary falls within the pension qualifying earnings band, so pension contributions are maximised relative to salary.

Employer National Insurance: £6,000

Employer NI is charged at 15% on all earnings above the Secondary Threshold of £5,000:

• Earnings above threshold: £45,000 - £5,000 = £40,000
• Employer NI: £40,000 x 15% = £6,000
• Monthly employer NI: £500

This is an effective rate of 13.3% on the gross salary. Unlike employee NI, there is no upper earnings limit for employer NI — it's a flat 15% on everything above £5,000.

Pension auto-enrollment: £1,162.8

UK employers must auto-enroll eligible workers into a workplace pension. The minimum employer contribution is 3% of qualifying earnings.

Qualifying earnings are the portion of salary between £6,240 and £50,270:

• Qualifying earnings: £45,000 - £6,240 = £38,760
• 3% contribution: £38,760 x 3% = £1,162.8/year (£96.9/month)

At 5%, this would be £1,938/year. At 8%, it would be £3,100.8/year.

Monthly and hourly cost

Period	Salary	+ NI	+ Pension	Total cost
Annual	£45,000	£6,000	£1,162.8	£52,162.8
Monthly	£3,750	£500	£96.9	£4,346.9
Weekly	£865.38	£115.38	£22.36	£1,003.13

Based on 1,950 working hours per year (37.5 hours/week), the cost per hour is £26.75. This is the figure to use when pricing projects or comparing against contractor day rates.

What the employee actually receives

While you pay £52,162.8 in total, the employee's take-home pay (after income tax and employee NI) is:

• Take-home pay: £35,919.6/year (£2,993.3/month)
• Income tax: £6,486
• Employee NI: £2,594.4

The gap between what you pay (£52,162.8) and what the employee receives (£35,919.6) is £16,243.2 — you pay 45% more than the employee takes home. The difference goes to income tax, employee NI, employer NI, and pension.

See full £45,000 take-home pay breakdown

Frequently asked questions

How much does a £45,000 employee cost the employer?

With the minimum 3% pension, a £45,000 employee costs £52,162.8/year (£4,346.9/month). This is 15.9% above the gross salary.

How much employer NI do I pay on a £45,000 salary?

Employer NI on £45,000 is £6,000/year (£500/month). That's 15% on earnings above the £5,000 Secondary Threshold.

What is the cost per hour for a £45,000 employee?

Based on 1,950 working hours per year, the total cost per hour is £26.75. The gross salary alone works out to £23.08/hour, but employer on-costs add £3.67/hour.

Can I reduce employer costs?

Yes. Salary sacrifice arrangements reduce both the employee's tax and your employer NI. For example, pension contributions via salary sacrifice save 15% in employer NI on the sacrificed amount. You can also claim the Employment Allowance (£10,500 off employer NI) if eligible.

Where can I see the full NI breakdown?

See the detailed NI calculation for £45,000 including employee NI, employer NI, and self-employed NI comparison.