How Employer National Insurance Affects Your Hiring Budget

For a marketing hire, employer national insurance adds 15% on annual earnings above £5,000 in 2026/27, before any Employment Allowance relief, under HMRC’s rules. Your hiring budget must also cover pension contributions and the resources the person needs to deliver, so the salary alone will understate the cost.

That does not make hiring the wrong decision. It means the decision should start with the employment cost and the work you expect the person to own.

How much employer national insurance will a marketing hire cost in 2026/27?

For an ordinary category A employee, the employer pays Class 1 secondary contributions on earnings above the secondary threshold.

HMRC’s 2026/27 rates set that threshold at £5,000 a year and the standard employer rate at 15%, for the tax year running from 6 April 2026 to 5 April 2027.

The annualised calculation is:

(Annual salary − £5,000) × 15%

The charge sits on top of the employee’s gross salary. It is separate from the employee’s own NI contribution, which comes out of their pay.

The examples below assume a full year of regular salary for a standard category A employee, without special employer reliefs or salary sacrifice arrangements. Payroll calculations use earnings periods, so rounding can produce small differences from these annualised figures.

What does that add to £45,000, £60,000 and £80,000 salaries?

These are illustrative salary scenarios, not claims about what a particular marketing role should pay.

The table combines the salary with the employer tax and a minimum employer pension contribution calculated on statutory qualifying earnings. Employment Allowance has not been deducted.

Illustrative annual salary	Employer NI, calculated using HMRC rates	Minimum employer pension, calculated using GOV.UK rules	Calculated annual subtotal
£45,000	£6,000	£1,162.80	£52,162.80
£60,000	£8,250	£1,320.90	£69,570.90
£80,000	£11,250	£1,320.90	£92,570.90

Each subtotal covers salary, employer NI and the pension assumption shown. Recruitment fees and the budget needed to do the marketing work remain outside it.

The employer charge does not stop increasing when earnings pass the upper limit used for employee NI calculations. A higher salary therefore continues to increase the employer’s contribution.

When assessing an offer, put this subtotal beside the proposed salary before discussing whether the role is affordable.

How much pension should you add to the hiring budget?

The pension calculation depends on your scheme’s rules, so check the contribution basis in your offer and pension documentation.

For a defined-contribution scheme using statutory qualifying earnings, GOV.UK sets the minimum employer contribution at 3% of earnings between £6,240 and £50,270.

That is the basis used in the table, assuming the employee is enrolled in the scheme.

The two higher salary examples have the same minimum employer pension contribution because both exceed the top of that qualifying-earnings band.

Your actual cost can be higher if you offer an enhanced employer contribution or your scheme calculates contributions on a broader definition of pay. A promise to contribute a percentage of the whole salary produces a different budget from the statutory qualifying-earnings calculation.

Check this before issuing an offer, especially if the candidate negotiates the pension alongside salary.

Can Employment Allowance reduce the bill for this hire?

Employment Allowance can reduce an eligible employer’s employer national insurance liability by up to £10,500 for the tax year, according to GOV.UK’s eligibility rules.

It is a business-level allowance, not a separate allowance for each employee.

For an established business, the distinction affects the marginal cost of a new hire: existing payroll may already use the available allowance, leaving the new role’s employer contribution fully payable.

If some allowance remains unused, the new hire may use that balance. You should apply it once across the company’s payroll forecast, rather than giving every proposed hire an allowance deduction.

Eligibility also needs checking. Connected companies face restrictions on claiming separately, and a company cannot usually claim where its sole director is the only employee liable for secondary Class 1 contributions.

Ask your payroll provider to confirm whether the business qualifies and how much allowance remains available in the relevant tax year.

For the hiring decision, record the role’s gross employment cost first. Then show any available relief separately in the company-wide forecast so you can see what happens when the allowance has been used.

What else belongs in the hiring budget?

Salary and statutory employment costs tell you what employing the person costs, but they do not tell you what delivering the role will cost.

A marketing leader may need agency support or specialist production capacity to carry out the agreed plan. Paid media and other campaign expenditure also require a budget beyond the person’s salary.

Separate recurring employment costs from recruitment and setup expenditure. That prevents a one-off recruiter invoice from becoming confused with the ongoing cost of the position.

Allow for any contractual bonus when forecasting payroll, including the employer charges that apply to it. If the compensation package changes during negotiations, update the employment-cost calculation before approving the offer.

Your budget should also identify who will provide work the new employee cannot reasonably cover. A senior hire may set direction and manage delivery without personally producing every campaign asset or maintaining every website integration.

The cost becomes easier to assess once the role has a defined remit and the supporting expenditure has an owner.

Should you hire now or put delivery systems in place first?

A permanent hire can be the right choice when you need sustained leadership, enough work exists for the role and the person will have authority to make decisions.

The tax bill should not obscure that judgement. A capable hire with a well-defined remit can be worth the full employment cost.

Before committing, check whether the business can explain what the person will own and how performance will be measured. Founder Engine’s guide to what to put in place before you hire a marketing director covers that preparation.

If the immediate problem is a defined gap in how growth work gets done, a bounded delivery engagement may also deserve consideration.

For example, you may need a dependable lead follow-up workflow or reporting that connects marketing activity to sales. Those requirements are different from needing someone to lead the marketing function indefinitely.

The Growth Install is for founders about to hire a marketing manager, head of marketing or fractional CMO. Over 90 days we install three agreed growth workflows on your own accounts, with tracking and a live dashboard, next to the people who'll own them. It's one flat fee for three months, then it stops. If you still hire, your new hire has something to take over and improve from day one.

The work happens alongside the people who will own those workflows, and the client owns its accounts and systems. Its scope does not cover every channel or replace an entire marketing department.

The comparison is between different needs: ongoing leadership through a hire, specialist delivery through an agency or agreed workflow installation through The Growth Install. Founder Engine’s explanation of when an outsourced growth team is better than another tool explores the delivery option.

Compare the scope and ownership of each option before comparing costs.

What else should you check before approving the hire?

Do I pay employer national insurance if the employee already pays NI?

Yes, where the relevant employer contribution rules apply. The employee’s contribution is deducted from their pay, while your employer contribution is an additional cost to the business.

Can I use Employment Allowance for a marketing hire?

An eligible business can apply its available allowance against qualifying employer contributions across payroll. Whether the marketing hire reduces the amount you pay depends on how much allowance existing employees already use.

Should I calculate the pension contribution on the whole salary?

Check your pension scheme and the employment terms you are offering. The statutory qualifying-earnings calculation used above excludes earnings outside its band, but your scheme or contractual promise may require contributions on more of the salary.

Should I choose The Growth Install instead of hiring a marketing leader?

Consider The Growth Install when the requirement can be defined as three agreed growth workflows and your team will own the installed systems. If you need continuing leadership across the marketing function, a permanent hire may be the better fit.