If you employ people, each one costs noticeably more than two years ago. The National Living Wage went up twice, and in April 2025 employer's National Insurance rose and started at a lower threshold. For a business with a team on or near the minimum wage, the two together add up.
Put in your own team below to see the yearly bill for each April since 2024. It assumes everyone is aged 22 or over and paid the National Living Wage.
For 10 staff on the National Living Wage, the yearly bill is now £272,590, up £31,460 since April 2024
- From 1 April 2024, at £11.44 an hour£241,130
- From 1 April 2025, at £12.21 an hour£261,090
- From 1 April 2026, at £12.71 an hour£272,590
Where the £31,460 comes from (13% more)
- Pay
- £223,080 to £247,850
- Employer's National Insurance, after any allowance
- £13,230 to £19,180
- Workplace pension
- £4,820 to £5,560
The National Living Wage and minimum wage rates
| From | 21 and over | 18 to 20 | Under 18 |
|---|---|---|---|
| 1 April 2024 | £11.44 | £8.60 | £6.40 |
| 1 April 2025 | £12.21 | £10.00 | £7.55 |
| 1 April 2026 | £12.71 | £10.85 | £8.00 |
The under 18 rate also applies to apprentices who are under 19 or in the first year of their apprenticeship. The rates change on 1 April each year. The National Living Wage has risen by 11% in two years, and the rate for 18 to 20 year olds by 26%.
Employer's National Insurance
| Tax year | Rate | Starts at, per employee | Employment Allowance |
|---|---|---|---|
| 2024 to 2025 | 13.8% | £9,100 a year | £5,000 |
| 2025 to 2026 | 15% | £5,000 a year | £10,500 |
| 2026 to 2027 | 15% | £5,000 a year | £10,500 |
The higher rate and the lower threshold both landed in April 2025. On a full-time worker on the National Living Wage, employer's National Insurance went from £1,823 a year to £2,968. The bigger Employment Allowance takes up to £10,500 off the total bill, which covers more of the rise for a small team than a large one.
One full-time worker, then and now
| From | Pay | Employer's National Insurance | Pension | Total |
|---|---|---|---|---|
| 1 April 2024 | £22,308 | £1,823 | £482 | £24,613 |
| 1 April 2025 | £23,810 | £2,822 | £527 | £27,159 |
| 1 April 2026 | £24,785 | £2,968 | £556 | £28,309 |
That's a worker aged 22 or over on the National Living Wage for 37.5 hours a week, paid for 52 weeks, with the minimum employer pension of 3% of earnings between £6,240 and £50,270. It's before any Employment Allowance, which applies to the whole business rather than to one person.
A team of 10 or 20
| Full-time staff on the National Living Wage | From 1 April 2024 | From 1 April 2026 | More a year |
|---|---|---|---|
| 10 | £241,130 | £272,590 | £31,460 |
| 20 | £487,260 | £555,680 | £68,420 |
Both with the Employment Allowance taken off. For a business with 20 staff on the National Living Wage, that's about £5,702 a month more than two years ago, before anyone has had a pay rise above the minimum.
From April 2027
The Budget on 28 October 2026 set the rates from 1 April 2027. The National Living Wage rises 3.9% to £13.21 an hour, the rate for 18 to 20 year olds to £11.27, and the rate for 16 and 17 year olds and eligible apprentices to £8.31. The Budget didn't raise the headline rate of employer's National Insurance, and the £5,000 threshold stays until 5 April 2028.
So a full-time worker on the National Living Wage will cost about £29,460 a year from April 2027: £25,760 in pay, £3,114 in National Insurance and £586 in pension. That's £1,151 more than now. For a team of 10 it's about £11,510 more a year, and for 20 about £23,020, after the Employment Allowance. We've assumed the pension thresholds stay as they are, which the government confirms each year.
What it means for the value of your business
A buyer values most owner-run businesses on their profit, so a bigger wage bill that hasn't been matched by higher prices comes straight off the figure they multiply. Buyers will also look at how much of your revenue goes on staff, and whether you've been able to pass the rises on to customers. If you have, it's worth showing them.
Our adjusted profit calculator works out the profit a buyer would use, including the cost of paying someone to do your job. Our guide on how to value a business explains the rest.
How we worked out the figures
Pay is the hourly rate times 37.5 hours a week for 52 weeks, rounded to the nearest pound. Employer's National Insurance is the rate on pay above the threshold for that tax year. The pension is the legal minimum employer contribution for someone aged 22 or over earning at least the £10,000 trigger; a 21-year-old isn't enrolled automatically but can ask to join. For 2024 to 2025, the Employment Allowance is left out for a team whose National Insurance bill reaches £100,000, standing in for that year's rule on the previous year's bill. Many employers pay more, and holiday pay is already in the 52 weeks. The figures leave out anything else you might pay, such as overtime, sick pay above the statutory amount, or training. It's a rough guide, not payroll advice.