How much does it really cost to hire in the UK in 2026?

The 120–125% loading rule of thumb works because every UK employee carries the same structural costs. The components are public, the rates are statutory, and there's no negotiation on the maths.

Pay £60,000, spend £75,519. Run your own numbers in the Employee Cost Calculator.The Teamed fee is roughly 8% of the loaded cost, sitting alongside the statutory contributions rather than stacking on top of them.

Class 1 NIC is the structural cost that nobody can engineer around. Every employer pays it on every pound of earnings above £5,000 per employee per year. There's no upper threshold, so high earners cost proportionally more in NIC than their salary suggests.

The Employment Allowance offset

Eligible employers can offset up to £10,500 of their annual Class 1 NIC bill via the Employment Allowance. The £100,000 cap on eligibility was removed for 2025–26, which broadened access. Teamed Ltd applies the Employment Allowance at the entity level; for clients hiring through Teamed, the saving is reflected in line-item transparency on every invoice rather than added on as a discretionary discount.

Apprenticeship Levy

Employers with an annual pay bill above £3 million pay the Apprenticeship Levy at 0.5% above a £15,000 allowance. For mid-market clients building UK teams through Teamed, this typically kicks in around 40–50 UK employees on average tech salaries. Levy funds can be drawn down for apprenticeship training within 24 months.

Class 1A and Class 1B NIC

If you provide benefits in kind (private medical, company cars, gym memberships, even some employer-paid insurance), Class 1A NIC at 15% applies on the cash-equivalent value reported via the P11D return. Class 1B NIC applies to PAYE Settlement Agreements at the same rate.

Auto-enrolment is non-negotiable. Every UK employer with at least one eligible jobholder must enrol them into a qualifying scheme on day one of eligibility and contribute at least the statutory minimum.

Qualifying earnings, the calculation band

The 3%/5% minimum applies to qualifying earnings: gross pay between £6,240 (lower threshold) and £50,270 (upper threshold) for the 2025–26 tax year. Salary above £50,270 is outside the qualifying-earnings band, which is why a £60k hire and a £100k hire show similar pension cost lines.

What competitive UK packages actually pay

Statutory minimum (3%) is the floor. The mid-market average for tech and professional services is 5%–8% employer match. Senior roles often see 10%+ as a retention lever. Teamed sets up the qualifying scheme during onboarding and administers contributions; the employer-match rate is your choice and varies the cost line accordingly.

The cost flattens above £50,270 because that's the qualifying-earnings cap. Match rate, not salary, drives the pension line for higher earners.

Holiday is the headline. Every UK worker is entitled to 5.6 weeks of paid annual leave (28 days for a five-day worker), unique among Teamed countries in that bank holidays are bundled into the 28-day count. There's no "PTO plus holidays" structure, the entitlement is one combined pot.

Statutory Sick Pay (SSP)

From 6 April 2026, SSP rose to £123.25 per week and became a day-one right, the three waiting days are abolished and the lower earnings limit removed. Most absences are short; the cost lands at a few hundred pounds per year per employee on average. Teamed runs SSP administration end-to-end.

Statutory Maternity / Paternity / Adoption / Shared Parental / Parental Bereavement Pay

All five statutory family-pay rates moved to £194.32 per week from 6 April 2026 (or 90% of average weekly earnings, whichever is lower). The first six weeks of SMP are paid at 90% of earnings; the remainder at the flat £194.32 rate for up to 33 weeks. Employers can reclaim 92% of SMP from HMRC (103% for small employers under the Small Employers' Relief threshold).

Bereaved Partners Paternity Leave Regulations 2026

New for 2026: up to 52 weeks of unpaid leave for partners where a mother or primary adopter dies. Rare event, but the cost when it triggers is one full year of cover.

The Teamed fee weighs heavier at lower salaries because it's flat. At £40k the fee is 14% of gross; at £150k it's 4%. For employers building junior or volume teams, the fee-to-salary ratio matters more than for senior hires.

Note: these figures exclude employer-paid benefits (private medical, life insurance), any enhanced employer pension match, and discretionary bonuses. Add those on top.

IR35 contractor classification

Engaging UK contractors via their own limited companies puts the tax-status assessment on the engager, not the contractor, for medium and large clients. A misclassified contractor can mean back-payroll-tax, employer NIC, and HMRC penalties stretching across 6 tax years. The cost of getting it wrong is materially bigger than the cost of getting it right. Teamed Guard and Teamed Protect are purpose-built for this, Guard layers misclassification cover on top of direct contractor engagements; Protect transfers liability to Teamed by routing the engagement through us.

Probation procedure costs

UK probation isn't a free pass to terminate. Even during probation, dismissals must follow fair procedure, written notice, opportunity to improve, documented review meeting. The cost is mostly time (manager hours, HR documentation), but the failure mode is real: a botched probation dismissal can become an unfair-dismissal claim post-April 2027 once the qualifying period drops to six months.

Class 1A NIC on benefits

Private medical, gym memberships, company cars, even employer-paid life cover above certain thresholds, these carry Class 1A NIC at 15% on the cash-equivalent value reported via P11D after the tax year. A £1,200/year private health policy adds £180 in Class 1A. Stacked across the team, this becomes material.

The pricing model matters because the alternative, providers who hide FX markup inside the management fee, adds 3–5% to every cross-currency invoice you don't see. On a £60k UK hire paid by a US company, that's £2,000–£3,000 a year of hidden margin.

Teamed's Zero FX Fixed commitment means the £479 stays £479 whether you pay in GBP, USD, EUR, or anything else. FX is absorbed at the platform level. There's no separate FX line on the invoice because there isn't one to disclose.

What's not included in the fee: the salary itself, statutory contributions (NIC, pension, levy), and any enhanced benefits you choose to provide. Those pass through at cost and appear as itemised lines on every invoice.