Ask most small business owners what a £30,000 hire costs and they will say £30,000. It is an entirely reasonable thing to think and it is wrong by a wide margin.

Here is the full number, built up line by line, for the 2025/26 tax year.

Employer National Insurance

The largest of the additions. Employers pay Class 1 secondary National Insurance at 15% on everything an employee earns above the £5,000 secondary threshold.

On a £30,000 salary: 15% of £25,000, which is £3,750.

Worth knowing: the Employment Allowance lets eligible employers reduce their total annual employer NI bill by up to £10,500. It applies across your whole payroll rather than to any individual hire, so if you have several employees it is already spoken for. Do not assume it cancels this line out.

Workplace pension

You must auto-enrol eligible staff into a workplace pension and contribute a minimum of 3%. The 3% applies to qualifying earnings — the band between £6,240 and £50,270 — not the whole salary.

On £30,000: 3% of £23,760, which is £713.

Many employers contribute more than the minimum to stay competitive. If you match at 5%, this line becomes £1,188.

Recruitment

If you use an agency, expect 15–20% of first-year salary. On £30,000 that is £4,500 to £6,000.

If you recruit yourself, it is cheaper in cash and expensive in time — job board fees, plus a realistic twenty to forty hours of someone senior’s attention on sifting, screening and interviewing.

Either way, it is a real cost that shows up in year one.

Equipment and software

A laptop, a phone, a monitor, and per-seat licences for everything your business runs on. Call it £1,200 to £2,500 in the first year, less thereafter.

Workspace

If your team is in an office, a desk in most UK cities runs to £2,000–£4,000 a year once you account for rent, rates and utilities per head. Fully remote businesses avoid most of this, though many contribute to a home-working setup.

The total

For a £30,000 salary, first year, with agency recruitment and an office desk:

| Line | Cost | |---|---| | Gross salary | £30,000 | | Employer NI | £3,750 | | Pension (minimum) | £713 | | Recruitment | £5,000 | | Equipment and software | £1,800 | | Workspace | £3,000 | | First-year total | £44,263 |

Ongoing years drop to around £35,000–£38,000 once recruitment and equipment fall away.

So a £30,000 hire costs you somewhere between £35,000 and £44,000, depending on how you recruit and whether you have an office. The salary is roughly two-thirds of the real number.

The costs nobody puts in a spreadsheet

Time to productivity. Most office hires take one to three months to become genuinely useful. You are paying full cost throughout.

Management overhead. Every hire consumes some of a manager’s week — one-to-ones, reviews, questions, the occasional difficult conversation.

Risk. If it does not work out, you have spent the recruitment fee, the onboarding time and the notice period, and you are starting again.

None of these are arguments against hiring. They are arguments for being clear-eyed about the number.

Why this matters when comparing options

When people compare a UK hire against a remote hire abroad, they usually compare salary against salary. That is not the comparison.

The right comparison is fully loaded cost against fully loaded cost: £35,000–£44,000 for the UK hire, against a single all-in monthly figure for a hire employed in India through an EOR, which includes their salary, their statutory employment costs and the management fee.

Do it that way and the gap is larger than the salary comparison suggests — because the India side has no employer NI, no auto-enrolment pension, and typically no separate recruitment fee.

Want to see both numbers side by side for your role? Work out your saving →

Figures are for the 2025/26 UK tax year. Rates change every April — check gov.uk before budgeting on them.