United Kingdom: what your employer pays, and what you keep
In United Kingdom, an employee on £5,000 a month gross costs their employer £5,687 and takes home £3,780. The gap is £1,908 a month. Almost nobody employed here has seen the first of those three numbers, because it never appears on a payslip.
The three numbers, at three salaries
| Gross | Employer pays | You keep | The gap |
|---|---|---|---|
| £3,000 | £3,387 | £2,453 | £934 |
| £5,000 | £5,687 | £3,780 | £1,908 |
| £8,000 | £9,137 | £5,520 | £3,618 |
Monthly. A single person, no dependants.
Every deduction, named
At £5,000 a month gross. Nothing here is rounded or grouped, because the grouped version is what hides the size of it.
Taken from your pay
- National Insurance (employee)£251
- NI upper rate (2%)£16
- Income tax£953
Paid on top, by your employer
- National Insurance (employer)£687
This column is the one you have never seen. It is real money, spent on you, that you were never shown.
How pay works here
- The personal allowance is £12,570, then 20% to £50,270, then 40%, then 45% above £125,140.
- Employee National Insurance is 8% between £12,570 and £50,270, and only 2% above it, so NI gets lighter as you earn more while income tax gets heavier.
- Employer National Insurance is 15% on everything above £5,000 a year. There is no upper limit, so it keeps rising with your salary.
- That £5,000 threshold is the reason the gap here is wider than most people assume.
Changed recently. The personal allowance stays frozen at £12,570 and the higher-rate threshold at £50,270. Employer National Insurance is 15% on everything above £5,000 a year, a threshold that dropped sharply in April 2025 and made employing people markedly more expensive.
What the gap is worth, if it were invested
This is the part that makes it worth knowing. £1,908 a month, at 8% a year, compounded quarterly.
10 years
£352,610
20 years
£1,131,185
30 years
£2,850,312
That is illustrative, not a forecast, and 8% is before inflation. The assumptions are stated in full in the methodology.
Nobody is suggesting that money is yours to take. Most of it funds pensions and healthcare, and it is not a loophole. The point is narrower and it is this: it is the largest number attached to your job, it is invisible, and how you are paid changes how much of it reaches you. That is worth understanding before you decide your problem is that you do not invest well enough.
Questions
How much does an employee really cost an employer in United Kingdom?
On a gross salary of £5,000 a month, the total cost to the employer is £5,687. The difference is employer contributions, which are paid on top of gross pay and never appear on the payslip.
What is the gap between employer cost and net pay in United Kingdom?
At £5,000 gross a month, the employer pays £5,687 and £3,780 reaches the employee's account. The gap is £1,908 a month.
Are these figures official?
They are computed from rates published by the HM Revenue & Customs and last checked on 2026-08-28. They are for planning and comparison, not for filing taxes, and they assume a single person with no dependants.
Where these numbers come from
Computed from rates published by the HM Revenue & Customs. Last checked 2026-08-28. Next review 2027-04-06.
What this assumes:
- England or Northern Ireland. Scotland has its own bands and rates, and this does not model them.
- A single person on category A National Insurance, no dependants.
- No pension contributions, no student loan, no salary sacrifice.
- The personal allowance tapers away between £100,000 and £125,140, which creates a 60% effective band. That is modelled.
For planning and comparison, not for filing taxes. This is not tax advice and I am not an adviser. Read what this is and what it is not, and check your own position with a local accountant before changing anything.
Work out your own numbers in the calculator, or see what the nine independence targets cost.