Complete Guide to Employer Statutory Costs in the United Kingdom (2025)

Employer NIC is 13.8% on employee earnings above the secondary threshold of GBP 9,100 per year. There is no upper earnings limit for employer NIC -- it applies on all earnings above the threshold. The Employment Allowance (GBP 5,000 per year) is available to eligible small employers to offset NIC costs. Note: the government has announced an increase to 15% from April 2025.

Under auto-enrolment, employers must contribute a minimum of 3% of qualifying earnings (GBP 6,240 to GBP 50,270 for 2024-25) to a workplace pension for eligible workers. Employees contribute a minimum of 5%, making the total minimum 8%. Many employers contribute more than the minimum. Auto-enrolment applies to workers aged 22 to state pension age earning above GBP 10,000 per year.

Employers with an annual pay bill exceeding GBP 3 million pay the Apprenticeship Levy at 0.5% of their total pay bill, minus a GBP 15,000 monthly allowance. Statutory Sick Pay is GBP 116.75 per week (2024-25), payable from the 4th day of sickness for up to 28 weeks. SSP is employer-funded, with no government reimbursement for most employers.

Total employer statutory costs in the UK are approximately 17-20% of gross salary for typical employees. This includes NIC at 13.8%, workplace pension at 3% minimum, and potentially the Apprenticeship Levy at 0.5%. For a median-salary employee, effective employer on-costs are around 17%. Employers should also budget for statutory holiday pay (28 days including bank holidays), statutory maternity/paternity pay, and notice-period pay.