UK Startup Team Budget Calculator

Total Cost of Employment is what you actually pay to have an employee on your payroll. It includes the gross salary the employee receives, plus mandatory employer costs: Employer National Insurance (13.8% on earnings above £9,100), minimum auto-enrolment pension contributions (3% of qualifying earnings between £6,240 and £50,270), and practical per-head costs like equipment and software licences. For a typical UK tech hire, TCE is 17-22% above gross salary. A Senior Engineer on £90,000 costs approximately £107,000-£110,000 in total annual cash.

Employer NI is charged at 13.8% on each employee's gross earnings above the secondary threshold, which is £9,100 per year in 2026/27. There is no upper limit for employer NI (unlike employee NI). So for a £90,000 salary: (£90,000 - £9,100) × 13.8% = £11,164 in Employer NI per year. This is on top of the salary and is not deducted from the employee's pay. It is a direct cost to the business.

Under UK auto-enrolment rules, employers must contribute a minimum of 3% towards an employee's pension. This contribution is calculated on qualifying earnings only, which is the portion of salary between the lower and upper qualifying earnings limits (£6,240 to £50,270 in 2026/27). For a salary of £90,000, the qualifying earnings are capped at £50,270, so the qualifying band is £50,270 - £6,240 = £44,030, and the minimum employer contribution is £44,030 × 3% = £1,321 per year. Most startups offering competitive packages pay 4-6% employer contributions.

London commands a salary premium of approximately 20-30% over the UK national average for most engineering roles. In practice, a Senior Full-Stack Engineer at £90,000 nationally would typically need a London offer of £108,000-£115,000 to be competitive. This increase also raises your Employer NI bill proportionally. The London vs Regional toggle in this calculator applies a 25% uplift to model London hiring, and a 13% reduction for regional hubs like Bristol, Manchester, or Edinburgh.

For a standard UK tech hire in 2026, budget approximately £1,500 one-off for equipment (mid-tier laptop, monitor, peripherals) or £2,000-£2,500 for high-spec setups. Annual software costs per engineer run roughly £600-£1,200 depending on tooling: GitHub (£15-40/month), Slack (£8-15/month), Jira (£8-15/month), AWS/GCP/Azure access, and increasingly AI coding tools like GitHub Copilot (£19-39/month). The calculator defaults to £1,500 equipment and £800 software, both adjustable under Advanced settings.

A typical 3-person seed engineering team in the UK comprises a Senior Full-Stack Engineer (£85,000-£95,000), a Mid Full-Stack Engineer (£60,000-£70,000), and either a Junior Engineer (£40,000-£48,000) or a DevOps engineer if infrastructure is a priority. At this stage, generalist full-stack engineers are more valuable than deep specialists. Offset cash constraints with equity: 0.5-1.0% vesting over 4 years is standard for senior seed hires in the UK. Total annual TCE for this three-person team at national rates is approximately £225,000-£240,000.

At Series A (typically 8-15 engineers), you need engineering leadership, but a VP Eng hire at £130,000+ is only justified if: you have 6 or more engineers, technical strategy decisions are slowing you down, and your CTO is spending more than 50% of their time on management rather than architecture. Before that inflection point, a strong Staff Engineer or Tech Lead is a more capital-efficient hire. The Seed template uses a Senior Engineer as team lead; the Series A template adds a VP Eng to reflect the shift in management needs.

Yes, equity is a genuine lever at Seed and Series A, but it has a market rate. UK startup candidates expect: Junior (0.05-0.1% vesting over 4 years), Mid (0.1-0.25%), Senior (0.25-0.75%), Staff/Lead (0.5-1.5%), VP Eng (0.75-2.0%). Going above market on equity while going below market on base is a valid strategy if you can articulate the upside clearly. Going below market on both is not competitive. Enterprise Mangement Incentive (EMI) options are the most tax-efficient mechanism for UK startups with fewer than 250 employees.

This calculator models permanent employee TCE only. Contractors are priced on a day rate basis and have a very different cost structure: no Employer NI, no pension obligation, no equipment cost from the employer, but a day rate that typically represents a 30-50% premium over the equivalent permanent salary gross. For a detailed contractor vs permanent comparison including UK IR35 rules, use the Permanent vs Contract Calculator linked below.