TAX & SALARY PLANNING

New Hire Calculator

Go beyond salary: Who Should I Hire, And How Much Will This Cost Me?

⊛ 1 min read | By Brent Morrison | November 2025

Home > Calcuators & Tools > Tax & Salary Planning > New Hire Calculator

New Hire Calculator
Current Team Costs
? Total annual gross salary cost for all current employees on payroll.
? Minimum employer contribution is 3%. Select the rate your company pays.
Create Scenario
Employees
*the rest of the year cost uses the start dates that you select when adding new employees to the team. It will pro-rata the cost based on the 12 months to
Subcontractors
Current Team Costs
Gross Wages£0
Employers NIC£0
Employers Pension£0
Freelancer Costs£0
Total Team Costs£0
Annual Total£0
Monthly Total£0
After (Annual) Team Costs
Gross Wages£0
Employers NIC£0
Employers Pension£0
Freelancer Costs£0
Total Team Costs£0
Annual Total£0
Monthly Total£0
Increase in Team Costs
Gross Wages£0
Employers NIC£0
Employers Pension£0
Freelancer Costs£0
Total Team Costs£0
Annual Total£0
Monthly Total£0

The rest of the year cost effect

After
£0
Before
£0
£0 £0

This will increase your costs by

£0

Assumptions

  • Employer NIC rate: 15% on salary above £5,000 per employee (2025/26 rates)
  • Employment Allowance: £10,500 offset against total employer NIC bill
  • Employer pension: 3% on salary above £6,240 per employee (Lower Earnings Limit)
  • Pro-rata calculations based on months remaining from start date to the rolling 12-month year end
  • Subcontractor costs are entered per month (no NIC/pension applies) — total is summed across the 12-month window
  • Per-employee annual cost = salary + employer NIC + employer pension for that individual

Common Questions About Hiring Costs

What are the hidden costs of hiring an employee?
Beyond the gross salary, you must account for Employer National Insurance (currently 15% above the threshold) and mandatory Pension Contributions (minimum 3%). You also need to budget for equipment, software licenses, and potential recruitment fees, which can add 20-30% to the base salary.
How accurate is this New Hire Calculator?
This tool provides a strategic estimate based on current UK tax bands and average overheads. It calculates salary, National Insurance, and pension obligations to give you a realistic "Total Cost of Employment" figure in under 90 seconds, helping you make safer cash flow decisions.
Should I hire a contractor or an employee?
Hiring an employee (PAYE) offers stability and control but comes with higher fixed costs (NI, Pension, Holiday Pay). A contractor offers flexibility and lower overheads but may have higher day rates. Use this calculator to see the full financial commitment of a permanent hire before deciding.
Check Out All Our Calculators →

Ready to Future-Proof Your Hiring Decisions?

Use our 90-second financial assessment to pinpoint your current staffing capacity, identify risk areas, and determine the optimal time to hire your next team member.

Get immediate, actionable insights to align your growth strategy with your financial reality.

Start Your 90-Second Assessment →

Assessment takes less than 2 minutes. No credit card required

Brent Morrison. Strategic accountancy partner at OutRise

ABOUT THE AUTHOR

Brent Morrison ACA CTA

Chartered Accountant and Chartered Tax Adviser

Member of the Institute of Chartered Accountants (ICAEW) and Taxation (CIOT) | Director at OutRise | He has over 12 years of experience advising high and fast growth companies across the UK. His approach combines a deep understanding of structuring data and systems, coupled with practical, real-world business experiences.

View Full Profile
LinkedIn

You May Also Enjoy Reading