What Is Total Cost of Employment (TCE)?
By PayMetric Labs Research Desk
Short answer
Total Cost of Employment (TCE) is what an employee actually costs a company, salary plus employer taxes, pension contributions, and benefits, typically 15-30% above the headline salary figure.
The salary you offer a candidate is only part of what hiring them costs. On top of gross salary, employers pay Employer National Insurance (UK) or Employer PRSI (Ireland), auto-enrolment or PRSA pension contributions, statutory sick pay provision, and often benefits like health insurance, equipment, and recruitment fees. In Ireland, Employer PRSI alone runs 11.05% for most employers on top of salary; UK Employer NI adds a further meaningful percentage above the Secondary Threshold.
For a €80,000 salary in Ireland, once Employer PRSI, auto-enrolment pension, statutory sick pay, and typical benefits are included, the true annual cost to the company often lands around €91,000, roughly 1.14 times the headline salary. UK figures follow a similar pattern once Employer NI and the Apprenticeship Levy are included.
TCE matters for two audiences: hiring managers and founders budgeting headcount need the real number, not just salary, to plan accurately, and contractors comparing a day rate against a permanent offer should understand that the employer's TCE for a permanent hire already includes benefits a contractor has to fund themselves out of their day rate.
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This glossary entry is for general information only and does not constitute financial, tax, or legal advice. Rates and thresholds shown reflect current published guidance and may change.