Business Glossary
What Is Fully Loaded Labour Cost UK?
Fully loaded labour cost is the true total employer cost of one employee including gross salary, employer National Insurance, pension contributions, and other employment costs. It is 14–18% higher than salary alone from April 2025.
The Formula
Fully Loaded Cost = Gross Salary + Employer NI (15% above £5,000) + Employer Pension (min 3%)
Worked Example — UK SME
A UK SME hires at £32,000. Employer NI (15% of £27,000): £4,050. Pension (3%): £960. Fully loaded = £37,010 — 15.7% above salary.
UK Benchmark
📊 From April 2025, the employer cost on top of salary is typically 14–18% following the NI rate increase from 13.8% to 15% and threshold reduction from £9,100 to £5,000.
Common Questions
What is the UK employer NI rate for 2025/26?
15% on employee earnings above £5,000 per year. The threshold was reduced and rate increased effective April 2025. Check GOV.UK for current rates.
What other costs should I include?
Private health cover, death in service insurance, recruitment costs (amortised), training costs, equipment and software, enhanced benefits.
How does NLW affect fully loaded costs?
Each £1/hour increase for a full-time worker adds approximately £1,820 salary cost plus approximately £273 additional employer NI — totalling approximately £2,093 additional annual cost per affected employee.
Related terms