£40,000 Salary - UK Employer Cost
To employ someone on a £40,000 salary in the UK, the total cost to the employer is £46,450 per year. That's +16.1% on top of the gross salary.
£40,000 Employment Cost Breakdown
| Description | Yearly | Monthly |
|---|---|---|
| Gross Salary | £40,000.00 | £3,333.33 |
| Employer National Insurance (15%) | +£5,250.00 | +£437.50 |
| Employer Pension (3%) | +£1,200.00 | +£100.00 |
| Total Employer Cost | £46,450.00 | £3,870.83 |
Employer Cost vs Employee Take Home
What the Employer Pays
total cost per year
What the Employee Gets
take home pay per year
The employer pays £14,130 more than what the employee takes home (44% difference)
Adjust Pension Contribution
Employee Salary
Enter the gross salary for 2025/26
Total Employer Cost
What it actually costs to employ someone
Understanding £40,000 Employer Costs
When hiring an employee on a £40,000 salary in the UK for 2025/26, the total cost to the employer is £46,450. This includes the gross salary plus employer National Insurance contributions and pension contributions.
Employer National Insurance is charged at 15% on all earnings above £5,000 per year. For a £40,000 salary, this amounts to £5,250 per year.
The minimum employer pension contribution under auto-enrollment is 3%, which adds £1,200 to the annual cost. Many employers offer higher pension contributions as part of their benefits package.
Compare this to the employee's perspective: see the £40,000 take-home pay calculation.